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Ellis issues 9.0%, five-year bonds dated January 1, 2016, with a $550,000 par value. The bonds pay interest on June 30 and December 31 and
Ellis issues 9.0%, five-year bonds dated January 1, 2016, with a $550,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $572,305. The annual market rate is 8% on the issue date.
Required:
1. Complete the below table to calculate the total bond interest expense over the bonds' life.
2. Prepare a straight-line amortization table for the bonds life.
3. Prepare the journal entries to record the first two interest payments.
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