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On January 2, 2016, Prebish Corporation issued $1,500,000 of 10% bonds to yield 11% due December 31, 2025. Interest on the bonds is payable annually,
On January 2, 2016, Prebish Corporation issued $1,500,000 of 10% bonds to yield 11% due December 31, 2025. Interest on the bonds is payable annually, each December 31. The bonds are callable at 101 (i.e., at 101% of the face amount) and on January 2, 2019, Prebish called $1,500,000 face amount of the bonds and retired them. (100 POINTS)
Instructions
- Determine the price of the Prebish bonds, when issued on January 2, 2016.
- Prepare an Amortization Schedule for 2016-2020 for the bonds.
- Prepare the journal entry to record the retirement of $1,500,000 by Prebish on January 2, 2019.
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