Blue Company issued 5 year, 7%, $100,000 bonds for 85 on January 1, 2018.The bond will pay
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Question:
Blue Company issued 5 year, 7%, $100,000 bonds for 85 on January 1, 2018.The bond will pay interest semi-annually on July 1 and January 1.The market rate is 9%.The company uses the effective interest rate method.
Required
1.Journalize the issuance (sale) of the bond.
2.Journalize the first interest payment on July 1st.
3.Accrue interest expense for December 31 (the company's year-end).
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