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Anderson/ Thurow Company issued $1,000,000 of five year bonds on Jan 1, 20X1. The bonds carried a face or coupon rate of 12% with interest
Anderson/ Thurow Company issued $1,000,000 of five year bonds on Jan 1, 20X1. The bonds carried a face or coupon rate of 12% with interest to be paid semi-annually on June 30th and Dec 31st. At the issuance date, the market interest rate for such bonds was 10%.
A. Calculate the issuance price for the bonds and show the journal entry to record their issuance.
B. Provide an amortization table for the first two periods.
C. Show the journal entries that would be made to accompany the first two periodic coupon interest payments.
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