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Prepare amortization table using effective interest method

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Question - Power Solutions Ltd. issued a $750,000, 5% bond on January 1, 2021. At that time, the market rate of interest is 7%. The bond matures in 7 years and pays interest on June 30th and December 31st.

a) Calculate the proceeds of the bond issue. Show your calculator input values.

b) Prepare the amortization table using the effective interest method of amortization. Complete the first two payments only.

c) Prepare the journal entries for 2021 (the issuance of the bond and the first two interest payments).

Reference no: EM133109932

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