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X Company issued at par 4-year term bonds with a par value of $100,000, dated January...

X Company issued at par 4-year term bonds with a par value of $100,000, dated January 1, 2020, and bearing interest at an annual rate of 6 percent payable annually on December 31. At the time of issue, the market rate for such bonds is 9 percent. X amortizes the discount or premium using effective interest rate method.

Required:

  1. Compute the selling price of bond.
  2. Record the journal entry.
  3. Prepare schedual of amortization.
  4. Record the adjusting entries for all years.
  5. Record the jornal entry of paying the principle at the end of period.

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Expert Solution

ekkarill92 answered 1 year ago
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