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On January 1, 2020, Toyota issued $800,000 of 8%, ten-year bonds at 105. Bonds pay...

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Accounting

On January 1, 2020, Toyota issued $800,000 of 8%, ten-year bonds at 105. Bonds pay interest annually on January 1 of each year.

  1. Prepare the journal entries to record the issuance of the bonds on January 1, 2020.
  2. Prepare the journal entry to record the interest expense on 12/31/2020.
  3. Show how the bonds payable will be reported on 12/31/2020 balance sheet.
  4. Prepare the journal entry for cash interest payment on 1/1/2021.
  5. Assume that on 1/2/2021, Toyota redeems the bonds at 102. Calculate the amount of gain or loss on bond redemption (indicate gain or loss). Prepare the journal entry to record the bond redemption.

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