Prepare bond amortization schedule until December

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Reference no: EM132821024

Question - On 1 January 2020, the company purchased an 8% bond, with a maturity of RM500,000 on 31 December 2022. Interest on bonds will be paid twice a year on 30 June and 31 December every year. The market rate of the bond is 10%. This investment was made for the purpose of collecting cash from interest income and principal payments upon maturity.

Required -

(i) Prepare a journal entry of bond acquisition.

(ii) Prepare bond amortization schedule until 31 December 2021.

(iii) Show journal entries to record receipt of interest and amortization of bonds in 2020.

Reference no: EM132821024

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