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Fiorella's Ferrari Company issues a $500,000, 10%, 3 year bond on January 1, 2011, that pays interest semiannually. The market rate of interest is currently

Fiorella's Ferrari Company issues a $500,000, 10%, 3 year bond on January 1, 2011, that pays interest semiannually. The market rate of interest is currently 12%. Compute the issue price of the bond, prepare the effective interest method chart, and all journal entries necessary for this bond until its retirement.

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