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Journal entry at the date of the bond purchase

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Question - On January 1, 2020, Sandhill Company purchased 8% bonds having a maturity value of $400,000, for $433,699.52. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sandhill Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

Required - Journal entry at the date of the bond purchase.

Reference no: EM132528167

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