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Olallieberry Corp. issued $350,000 worth of 5% bonds on January 1, 20x2, which will mature on December 31, 20x3. The market rate on the date

  1. Olallieberry Corp. issued $350,000 worth of 5% bonds on January 1, 20x2, which will mature on December 31, 20x3. The market rate on the date of issuance is 6%. Interest will be paid semiannually on June 30 and December 31.

Required:

  1. Calculate the purchase price of the bonds.
  2. Does the price make sense? Explain.
  3. How will the bond value appear in the newspaper?
  4. Record all journal entries necessary from the date of issue until the maturity date. Be sure to show all calculations.

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