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On January 1, 2014, Vermin Company issues $2million, 10 year, 7% bonds at 98, with interest payable every December 31. The straight line method is

On January 1, 2014, Vermin Company issues $2million, 10 year, 7% bonds at 98, with interest payable every December 31. The straight line method is used to amortize bond premium or discount.

Required:

A. Prepare the journal entry to record the sale of the bonds on January 1, 2014.

. Prepare the journal entry to record interest expense and bond discount amortization on December 31, 2014 assuming no previous accrual of interest.

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