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Prepare journal entry for the second semi-annual interest

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Question - On July 1, 2021, Santa Ana Company issues 550,000 13-year 12%, semi-annual bonds. On the issue date, the market rate is 14%.

1. Determine the amount of cash received from the issuance of the bond. Must show 4 steps.

2. Prepare the journal entry to record the issuance of the bond.

3. Prepare the journal entry for the first semi-annual interest payment AND amortization of the bond discount of premium using the straight-line method of amortization.

4. Prepare the journal entry for the second semi-annual interest payment AND amortization of the bond discount or premium using the straight-line method.

5. Prepare the journal entry for the first semi-annual interest payment AND amortization of the bond discount or premium using the effective interest method of amortization.

6. Prepare the journal entry for the second semi-annual interest payment AND amortization of the bond discount of premium using the effective interest method of amortization.

Reference no: EM133019110

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