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On January 1, 2020, Grouper Corporation issued $780,000, 5%, 5-year bonds dated January 1, 2017, at 98. The bonds pay annual interest on January 1.
On January 1, 2020, Grouper Corporation issued $780,000, 5%, 5-year bonds dated January 1, 2017, at 98. The bonds pay annual interest on January 1. The company uses the straight-line method of amortization and has a calendar year end. Prepare all the journal entries that Grouper Corporation would make related to this bond issue through January 1, 2021. Be sure to indicate the date on which the entries would be made. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2020 Cash Discount on Bonds Payable Bonds Payable (To record sale of bonds at a discount) December 31, 2020 Interest Expense Discount on Bonds Payable Cash (To record annual accrued bond interest and amortization of bond discount) (To record payment of bond interest liability)
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