Issue bonds and pay interest - effective interest method

1/1/2022 Montvale Corp. issued bonds payable that will be due in 10 years. Face value of bonds 700,000 Stated interest rate 6% Proceeds of bond issue 666,633 The company uses the effective interest method of amortization. Interest payment dates July 1 January 1 Effective interest rate 7%

INSTRUCTIONS: Prepare the journal entry to issue the bonds. Prepare the journal entries related to interest payments for the year.

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