On 1/1/2019, Newmanium, Inc. issues $40,000 in bonds having a stated rate of 7%. The...
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On 1/1/2019, Newmanium, Inc. issues $40,000 in bonds having a stated rate of 7%. The bonds mature in 6 years, and interest is paid annually each 12/31. The market (effective) rate is 9%.What are the proceeds of this bond (i.e., the issuance price)?Record all necessary journal entries during the first two years of the bonds life assuming the company uses the straight-line amortization method:
Record the necessary journal entries on 12/31/19 and 12/31/20 assuming the company uses the effective-rate amortization method:
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