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On August 3 1 , Year 7 , DEF Company issues a $ 1 , 0 0 0 , 0 0 0 1 0 -

On August 31, Year 7, DEF Company issues a $1,000,00010-year 5% bond. The market rate of interest is 5.5%. The bond quote is 96.1932. The companys fiscal year end is July 31. The bond pays interest semi-annually on February 28, and August 31 each year.
Required:
a.) Prepare a bond amortization table as outlined below for the first 2 years of the bond.
b.) Record the journal entry for the issuance of the bond (August 31, Year 7)
c.) Record the journal entry for the first semi-annual payment. (February 28, Year 8)
d.) Record the journal entry for the year end adjustment. (July 31, Year 8)
e.) Record the journal entry for the second semi-annual payment. (August 31, Year 8)
Bond amortization table
Date Payment Interest expense Discount amortized Carrying value

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