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  3. on january 1, 2020, stellar company purchased 10%

On January 1, 2020, Stellar Company purchased 10% bonds having a maturity value of $300,000,...

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Accounting

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On January 1, 2020, Stellar Company purchased 10% bonds having a maturity value of $300,000, for $323,955.30. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Stellar Company uses the effective interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method Interest Premium Revenue Amortized Cash Received Carrying Am of Bonds Date 1/1/20 $ 1/1/21 1/1/22 1 1/1/23 1/1/24 1/1/25

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