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Prepare partial bond premium amortization schedule

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Question - On July 1, 2020 Shamrock Limited issued bonds with a face value of $990,000 due in 20 years, paying interest at a face rate of 7% on January 1 and July 1 each year. The bonds were issued to yield 9%. The company's year-end was September 30. The company used the effective interest method of amortization.

Required -

1) What is the premium or discount on the bonds.

2) Prepare partial Bond Premium/Discount Amortization Schedule for Shamrock Limited. Only the entries in the schedule for July 1, 2020, January 1, 2021, and July 1, 2021.

3) What it the journal entry to record the issue of the bonds.

4) What is the year-end accrual entry for Shamrock Limited at September 30, 2020.

5) What is the journal entry on January 1, 2021 when Shamrock makes the first payment of interest on the bonds.

Reference no: EM132848726

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