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On January 1, 2019, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2023,...

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Accounting

On January 1, 2019, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2023, for $103,889.65 minus bond issue costs of $3,000. The bonds carry a stated rate of interest of 10% payable annually on December 31 and were issued to yield 9%. The company uses the effective interest method of amortization to amortize any discounts or premiums and the straight-line method to amortize the debt issuance costs.

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