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Prepare the journal entries to record the issuance

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Question - Fulton Manufacturing needed financing to build new equipment. On January 2, 2020, Fulton issued $550,000 of 5-year bonds with a 12% coupon rate. Interest payments are paid semiannually on June 30th and December 31st. The yield rate for similar bonds on the date of issue was 10%.

Required -

a. Complete the partial bond amortization schedule below using the effective interest method (through December 31, 2020).

b. Prepare the journal entries to record the issuance of the bonds and the first interest payment.

Reference no: EM133123249

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