On January 1, 2024, for $17.8 million, Cenotaph Company purchased 8% bonds, dated January 1,...
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Accounting
On January 1, 2024, for $17.8 million, Cenotaph Company purchased 8% bonds, dated January 1, 2024, with a face amount of $19.8 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31.
Required:
- Prepare the journal entry to record interest on June 30, 2024, using the effective interest method.
- Prepare the journal entry to record interest on December 31, 2024, using the effective interest method.
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