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On October 1, 2019, Ball Company issued 9% bonds dated October 1, 2019, with a face amount of $100,000. The bonds mature in 8 years.
On October 1, 2019, Ball Company issued 9% bonds dated October 1, 2019, with a face amount of $100,000. The bonds mature in 8 years. Interest is paid semiannually on March 31 and September 30. The proceeds from the bond issuance were $101,131.59 to yield 8.80%. Ball Company has a December 31 fiscal year-end and does not use reversing entries.
Required:
1. | Prepare journal entries to record the issuance of the bonds and the interest payments for 2019 and 2020 using the effective interest method. |
2. | Prepare journal entries to record the issuance of the bonds and the interest payments for 2019 and 2020 using the straight-line method. |
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