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How do determine the selling price of the bonds

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Reference no: EM132714476

Mitchell Inc. issued 198, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each June 30, and December 31, and were issued to yield 5%. The bonds mature December 31, 2024, and the company uses the effective interest method to amortize bond discounts or premiums.

Problem a. Determine the selling price of the bonds. Round amount to the nearest whole dollar.

Problem b. Make amortization schedule for the full bond term.

Problem c. Prepare journal entries on the following dates.

1. January 1, 2020, bond issuance.

2. June 30, 2020, interest payment.

3. December 31, 2020, interest payment.

Reference no: EM132714476

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