On January 1st, 2011, ABC Inc. purchased a $1,000 bond which pays interest semi-annually on...
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Accounting
On January 1st, 2011, ABC Inc. purchased a $1,000 bond which pays interest semi-annually on June 30th and December 31st each year at the stated rate of 8% per annum. The market rate was 6% on January 1st, 2011. The bond matures on December 31st, 2015. There is no active market for the bond, So ABC will account or it using the amortized cost method. Required: a) How much was the bond purchased for (ignore brokerage fees)? b) Provide all required journal entries for 2011
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