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XYZ Corp. announces an offer to issue bonds with a $100,000 par value, an 8%...

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Accounting

XYZ Corp. announces an offer to issue bonds with a $100,000 par value, an 8% annual contract rate with interest payable semi-annually, and with a three-year life. The market rate for XYZs bonds is 10%.

Q1: If the bonds were issued December 31, what would the issuance entry be?

Q2: How would you calculate the amortization amount for our prior example?

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