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Prepare the journal entries to record the purchase of bonds

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Question - The Bradford Company issued 13% bonds, dated January 1, with a face amount of $80 million on January 1, 2021 to Saxton-Bose Corporation. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity, the market yield is 15%. Interest is paid semiannually on June 30 and December 31.

Required - Prepare the journal entries to record the purchase of the bonds by Saxton-Bose on January 1, 2021, interest revenue on June 30, 2021 and interest revenue on December 31, 2021 (at the effective rate).

Reference no: EM133113237

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