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On January 1, 2018, Club Company purchased 10% bonds, dated January 1, 2018, with a face amount of $20 million. The bonds mature in 2027
On January 1, 2018, Club Company purchased 10% bonds, dated January 1, 2018, with a face amount of $20 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.
Required:
- Determine the price of the bonds at January 1, 2018.
- Prepare the journal entry to record the bond purchase by Club on January 1, 2018.
- Prepare the journal entry to record interest on June 30, 2018, using the straight-line method.
4. Prepare the journal entry to record interest on December 31, 2018, using the straight-line
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