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John Master issued $100,000 of 8% term bonds on 1 Jan 2010 due on 1 Jan 2015, with interest payable each 1 July and 1
John Master issued $100,000 of 8% term bonds on 1 Jan 2010 due on 1 Jan 2015, with
interest payable each 1 July and 1 Jan. because investors required an effective-interest
rate of 10%, they paid $92,278 for the $100, 000 of bonds, creating $7,722 discount.
Records the John Master's:
a) Issuance of its bonds at a discount on 1 Jan 2010.
b) First interest payment on 1 July 2010 and amortization of the discount.
c) The interest expense accrued at 31 December 2010 and amortization of the
discount.
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