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Instructions On January 1 , Year 1 , Knorr Corporation issued $ 1 , 0 0 0 , 0 0 0 of 9 % ,

Instructions
On January 1, Year 1, Knorr Corporation issued $1,000,000 of 9%,5-year bonds dated January 1, Year 1.
The bonds pay interest annually on December 31. The bonds were issued to yield 10%. Debt issuance
costs associated with the bonds totaled $18,000.
Required:
Prepare the journal entries to record the following:
January 1, Year 1
December 31, Year 1
December 31, Year 1
December 31, Year 2
December 31, Year 2
Sold the bonds at an effective rate of 10%
First interest payment using the effective interest method
Amortization of bond issue costs using the straight-line method
Second interest payment using the effective interest method
Amortization of bond issue costs using the straight-line method
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