Legacy issues $590,000 of 7.5%, four-year bonds dated January 1, 2021, that pay interest semiannually...
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Legacy issues $590,000 of 7.5%, four-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. They are issued at $542,310 when the market rate is 10%. Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 3. Prepare an effective interest amortization table for the bonds' first two years. 4. Prepare the journal entries to record the first two interest payments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare an effective interest amortization table for the bonds' first two years. (Round your intermediate and final answers to the nearest whole dollar.) Semiannual Interest Period-End 01/01/2021 06/30/2021 12/31/2021 06/30/2022 12/31/2022 Cash Interest Paid Bond Interest Expense Discount Amortization Unamortized Discount Carrying Value $ 47,690 S 542,310) 42,700 547,301 37.459 552,541 31,957 552,541 26,180) 552,541
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