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On March 1, Gescan Electric Inc. issued and sold $312,000, 7 year bonds with an interest rate of 9%. The market rate at the time
On March 1, Gescan Electric Inc. issued and sold $312,000, 7 year bonds with an interest rate of 9%. The market rate at the time of issue was 10%. Any premium or discount on the bond is amortized using the effective interest rate method. Interest will be paid annually on February 28. The Present value of 1 and annuity of 1 of 10% for 6 periods are 0.5132 and 4.8684, respectively. Use a 4 decimal factor for the bond calculation.
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Step: 1
To prepare journal entries for the issuance and subsequent amortization of the bonds well go step by step 1 Initial Issuance on March 1 Debit Cash 312...
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Financial Accounting
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
5th Canadian edition
9781259105692, 978-1259103285
