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2. Ridgetop Company issued the following ten-year bonds on January 1, 2009: $100,000 maturity value, 5% interest payable annually on each December 31. The bonds

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2. Ridgetop Company issued the following ten-year bonds on January 1, 2009: $100,000 maturity value, 5% interest payable annually on each December 31. The bonds were dated January 1, 2009 and the accounting period ends December 31. The bonds were issued for $98,000. (20') Requirements: A Calculate the following (assume straight-line amortization): 1. Cash inflow at date of issuance Cash outflow under the 10 year period: 2. Principal 3. Interest 4. Total interest expense 5. Stated interest rate 6. Interest expense for 2010 Balance Sheet at December 31, 2010: 7. Bonds payable 8. Unamortized amount 9. Net book value of bonds B. Assuming instead that the accounting period ends on June 30, give the adjusting entry related to interest expense for 2009. No adjusting entries have been made during the year

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