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n On January 1, 2021, Shirley Corporation purchased 10% bonds dated January 1, 2021, with a face amount of $10 million. The bonds mature in
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On January 1, 2021, Shirley Corporation purchased 10% bonds dated January 1, 2021, with a face amount of $10 million. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31 . (EV of \$1. PV of $1. EVA of \$1. PVA of \$1, EVAD of $1 and PVAD of $1 ) (Use appropriate factor(5) from the tables provided.) Required: 1. Determine the price of the bonds at January 1,2021. 2. Prepare the journal entry to record the bond purchase by Shirley on January 1, 2021. 3. Prepare the journal entry to record interest on June 30, 2021, using the effective interest method. 4. Prepare the journal entry to record interest on December 31, 2021, using the effective interest method. Complete this question by entering your answers in the tabs below. Prepare the journal entry to record the bond purchase by Shirley on January 1, 2021, to record interest on June 30,2021 and Dec 31, 2021, using the effective interest method. (If no entry is required for a transaction/event, select "No journal entry required" in first account field. Enter your answers in whole dollars not in millions.) Journal entry worksheet Record the $10 million 10% bonds purchased by Shirley on January 1,2021 . Note: Eniter debits before credits Step by Step Solution
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