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AAA purchased, on January 1, 2020, $80,000 of 9%, 5-year bonds of BBB for $74,086, which provides an 11% return. The bonds pay interest annually.
AAA purchased, on January 1, 2020, $80,000 of 9%, 5-year bonds of BBB for $74,086, which provides an 11% return. The bonds pay interest annually. Effective-interest amortization is used. When the bonds are purchased as a held-to-maturity investment, prepare AAAs journal entries for the receipt of annual interest and discount amortization in 2020.
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