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method On the first day of its fiscal year, Ebert Company issued $50,000,000 of 10-year,...

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Accounting

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method On the first day of its fiscal year, Ebert Company issued $50,000,000 of 10-year, 7% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 9%, resulting in Ebert receiving cash of $43,495,895. The company uses the interest method a. Journalize the entries to record the following: 1. Sale of the bonds 2. First semiannual interest payment, including amortization of discount. Round to the nearest dollar. sula e uom 3. Second semiannual interest payment, including amortization of discount. Round to the near- est dollar b. Compute the amount of the bond interest expense for the first year. Explain why the company was able to issue the bonds for only $43,495,895 rather C. than for the face amount of $50,000,000. ribnedOA

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