El Conquistador, Inc., finances operations with both bonds and stock. Suppose El Conquistador issued ($ 500,000) of
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El Conquistador, Inc., finances operations with both bonds and stock. Suppose El Conquistador issued \(\$ 500,000\) of 10 -year, \(8 \%\) bonds payable under various market conditions. Match each market interest rate with the appropriate bond price, as follows. The three possible bond prices are \(\$ 467,000 ; \$ 500,000\); and \(\$ 536,000\).
El Conquistador pays annual interest each December 31.
After determining the respective bond prices, make the following journal entries for the bond discount situation (explanations are not required):
How much total interest expense will El Conquistador have during the 10 -year life of these bonds?
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