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On March 1, 2022, Brown Corporation issued 8% bonds dated February 1, 2022, the face...

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Accounting

On March 1, 2022, Brown Corporation issued 8% bonds dated February 1, 2022, the face amount of $500,000. The bonds were sold for the present value of the bonds on March 1, 2022, plus one-month accrued interest. The bonds mature on January 31, 2023. Interest is paid semiannually on July 31 and January 31. Brown's fiscal year ends on December 31 each year. The effective annual interest rate is 10%. Required: (a) What is the appropriate discount rate used to derive the present value of the bonds on March 1, 2022? (b) Prepare the journal entry to record the accrued interest that was included in the proceeds received from the bond sale on March 1, 2022. (c) Prepare the journal entry to record the issuance of the bonds (excluding the recording of accrued interest) on March 1, 2022. (d) Prepare the journal entry to record the interest expense, discount amortization, and cash payment for interest on July 31, 2022

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