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P14-20 (103,4,5] (Issuance and Retirement of Bonds) StarCenter Co. is building a new music arena at a cost of $5,600,OOQ. It received a down payment
P14-20 (103,4,5] (Issuance and Retirement of Bonds) StarCenter Co. is building a new music arena at a cost of $5,600,OOQ. It received a down payment of $8001000 from local businesses to support the project, and now needs to borrow $5000,000 to complete the project. It therefore decides to issue $5000,000 of 8%%, 20-year bands. These bonds were issued on January 1, 2016. and pay interest annually on each January 1. The bands yield 10%. StarCenter paid $60,000 in bond issue costs related to the bond sale Instructions (a) Prepare the journal entry to record the issuance of the bands and the related bond issue costs incurred an January 1, 2016. (b) Prepare a bond amortization schedule up to and including January 1, 2020, using the effective interest method. (c) Assume that on July 1, 2019, StarCenter Co. retires 40%% of the bands at a cost of $2,040,000 plus accrued interest. Prepare the journal entry to record this retirement
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