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10 On 7/1/21, ABC sold 10% bonds having a maturity value of $1,000,000 for $1,081,105, resulting in an effective yield of 8%. The bonds are
10 | On 7/1/21, ABC sold 10% bonds having a maturity value of $1,000,000 for $1,081,105, resulting in an effective yield of 8%. The bonds are | ||||||||
dated 7/1/21, and mature 7/1/26. Interest is payable semiannually on July 1 and January 1. ABC uses the effective interest method of | |||||||||
amortization for bond premium or discount. Record the adjusting entry for the accrual of interest and the related amortization on 12/31/21. | |||||||||
Hint: Develop an abbreviated amortization schedule to accurately determine the interest expense. | |||||||||
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