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Calculate the price ithaca would have paid

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Question - On January 1, 2021, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $200,000. The Cortland bonds have a stated interest rate of 9%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows:

January 1, 2021 10.0%

June 30, 2021 11.0%

December 31, 2021 12.0%

Required - Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2021 (ignoring brokerage fees), and prepare a journal entry to record the purchase.

Reference no: EM133165948

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