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Prepare a bond amortization schedule

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Question - Grouper Co. sells $396,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 8%. On October 1, 2021, Grouper buys back $118,800 worth of bonds for $125,800 (includes accrued interest). Give entries through December 1, 2022.

Required -

1. Prepare a bond amortization schedule using the effective interest method for discount and premium amortization. Amortize premium or discount on interest rates and at year-end.

2. Prepare all of the relevant journal entries from the time of sale until December 31, 2022. (Assume that no reversing entries were made.)

Reference no: EM133037866

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