Journalize the entry to amortize the bond premium

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Reference no: EM131285832

On January 2, 2010, Parsons Company purchased $80,000, 10 year, 7% government bonds at 104, including the brokerage commission. January 2, is an interest payment date.

Required:

(1) Journalize the entry to record the bond purchase.

(2) Journalize the entry to amortize the bond premium on December 31, 2010.

(3) What is the relationship between the market rate of interest and the coupon rate on the bond investment acquisition date.

Reference no: EM131285832

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