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On June 30 of Year 1, BMO Company purchased land for expansion with an assessed value of $543,305 by issuing a 5-year, zero-interest-bearing note. The
On June 30 of Year 1, BMO Company purchased land for expansion with an assessed value of $543,305 by issuing a 5-year, zero-interest-bearing note. The face value of the note is $875,000. Required a. Compute the rate of interest implied by this transaction. b. Prepare an amortization schedule for the first two years of the note using the effective interest method. c. Prepare the journal entries on the following dates. 1. June 30 of Year 1 -Note issuance 2. December 31 of Year 1-Year-end adjusting entry Note: Round rate to the nearest whole number. Note: Round each amount in the table to the nearest whole dollar. Note: Round your answer to the nearest whole dollar
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