ABC Inc. issued bonds with a face value of $500,000 on January 1st, 2023, with a stated
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Question:
ABC Inc. issued bonds with a face value of $500,000 on January 1st, 2023, with a stated interest rate of 6% payable semi-annually. The bonds mature in 5 years. The market interest rate at the time of issuance was 5%. Calculate: a) Issue price of the bonds. b) Total interest expense over the life of the bonds. c) Carrying amount of the bonds after two interest payments.
d) Journal entry to record the first semi-annual interest payment.
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