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On January 1, 2016, Dubai Company purchased 12% bonds, having a maturity value of $601,920, for $500,000 The bonds provide the bondholders with a 20%
- On January 1, 2016, Dubai Company purchased 12% bonds, having a maturity value of $601,920, for $500,000 The bonds provide the bondholders with a 20% yield. They are dated January 1, 2016, and mature January 1, 2019, with interest receivable December 31 of each year. Dubai Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.
Required: (3 marks)
- Prepare the journal entry at the date of the bond purchase.
- Prepare a bond amortization schedule.
- Prepare the journal entries to record the interest received and the amortization for 2016 ,2017, 2018 and 1/1/2019.
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