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Prepare an effective interest amortization table

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Reference no: EM132825580

Problem - Effective Interest - Amortization of bond discount - Legacy issues $640,000 of 8.5%, four-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $570,443 when the market rate is 12%.

Required -

1. Prepare the January 1 journal entry to record the bonds' issuance.

2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.

3. Prepare an effective interest amortization table for the bonds' first two years.

4. Prepare the journal entries to record the first two interest payments.

Reference no: EM132825580

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