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Monkey Company sells $400,000 of 12% bonds on June 1, 2019. The bonds pay interest on December 1 and June 1. The due date of
Monkey Company sells $400,000 of 12% bonds on June 1, 2019. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2023. The bonds yield 10%. On October 1, 2020, Monkey Company buys back $120,000 worth of bonds for $126,000 (hint: dont forget how the carrying value of the bond changes from 6/1 to 10/1 in determining a potential gain/loss). The company uses the effective interest method of amortizing applicable premiums and discounts.
Required:
- Prepare the journal entries that would be required on each of the following dates.
- June 1, 2019
- December 1, 2019
- December 31, 2019
- June 1, 2020
- October 1, 2020
- December 1, 2020\
Can you also provide an amortization schedule for this?
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