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On July 1, 20X5, Jeremy issues $6,000,000 of 10-year bonds dated July 1, 20X5 at 98 when the market rate of interest was 7%. Jeremy
On July 1, 20X5, Jeremy issues $6,000,000 of 10-year bonds dated July 1, 20X5 at 98 when the market rate of interest was 7%. Jeremy uses the effective-interest method of amortization. Interest is paid each January 1 and July 1. The entry to record the accrual for the first semiannual period on December 31 20X5 will include a
credit to interest payable for more than $205,800
credit to premium on bonds payable for $120,000
credit to cash for less than $205,800
credit to interest payable for less than $205,800
debit to interest expense for $411,600
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