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Birzeit Corporation are to purchase a new production line. For this purpose, they decided to issue $ 500,000 face value bonds, on January 1, 2020.
Birzeit Corporation are to purchase a new production line. For this purpose, they decided to issue $ 500,000 face value bonds, on January 1, 2020. The stated interest rate on the bonds is 8% per year, paid annually on December 31 of every year. Bonds have a term of 3 years. On the date of issuance, the market rate of return was 6%. Required: a- Journalize the issuance of these bonds on 1 January, 2020. (3 Points) Account title Debit b- Fill the required amounts in the following table: (5 Points) Date Cash interest paid (S) Jan 1, 2020 Dec 31, 2020 Credit Actual Interest Expense (S) Amortization of Bond premium Carrying Value of Bonds (S) c- Journalize the entries required on Dec 31, 2020 (3 Points) Account Title Debit Credit
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