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On January 1, 2010 (three years prior to maturity) after all interest payments and amortization adjustments, Hart Company redeemed at 102 its 15-year, 10% bonds
On January 1, 2010 (three years prior to maturity) after all interest payments and amortization adjustments, Hart Company redeemed at 102 its 15-year, 10% bonds with a face value of $500,000. The bonds were originally issued on January 1, 1998 at 97 with a maturity date of January 1, 2013. The bond issue costs relating to the issuing the bonds in 1998 were $9,000. The bonds pay 10% interest annually each December 31. Hart uses the straight-line method to amortize bond discounts, premiums, and issue costs. 1. Prepare the January 1, 1998 journal entry/entries) to record issuing the bonds and paying the related bond issue costs. 2. Prepare the December 31, 2009 journal entry to record paying the interest and the amortization of bond issue costs. 3. Prepare the journal entry to record the bond retirement on January 1, 2010
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