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On January 1, 2017, Trapp Enterprises issued 10%, 10-year bonds with a face amount of $100,000 at 104. Interest is payable annually on January 1.

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On January 1, 2017, Trapp Enterprises issued 10%, 10-year bonds with a face amount of $100,000 at 104. Interest is payable annually on January 1. The bonds were issued for an effective interest rate of 9%. Instructions: Prepare the entries to record the issuance of the bonds and the first annual interest accrual and amortization assuming that the company uses effective-interest amortization. On January 1, 2017, Timber Corporation issued $800,000, 6%, 5-year bonds for $735, 110. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid annually on January 1. The company uses the effective interest method of amortization

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