Chapter 10 Team Project ISSUING BONDS On January 1, Year I, a company issued of...
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Chapter 10 Team Project ISSUING BONDS On January 1, Year I, a company issued of $800,000 of bonds for cash of $684,627. The bonds mature in five years. The bonds have a stated interest rate of 8% payable annually. The market rate was 12% on the date of issuance. Were these bonds issued at a discount or at a premium? Why? Prepare the journal entry to record the issuance (sale) of the bonds: Canymity Amortization of Discount (Net Liability) None Complete the following interest schedule (assuming straight-line amortization): Cash Interest Date Payment of Expense Interest 1/1/Year 1 None None 12/31/Year 1 12/31/Year 2 12/31/Year 3 12/31/Year 4 12/31/Year 5 Prepare the journal entry to record the first payment of interest on December 31, Year
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