Summit Limited issued $8,000,000 in bonds on 31 December 2015. The bonds mature on 31...
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Accounting
Summit Limited issued $8,000,000 in bonds on 31 December 2015. The bonds mature on 31 December 2019, and bear interest at 6% per annum, payable every 30 June and 31 December. The bonds were issued to yield 8% per annum. Summit's fiscal year ends on 31 December. Summit uses the effective-interest method of amortization.
Required:
1.
Calculate the proceeds from issuance.
2.
Prepare the effective-interest amortization schedule for the bond.
3.
Prepare the journal entries for the first year of the bond
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