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Park Corporation is planning to issue bonds with a face value of $2,300,000 and a coupon rate of 10 percent. The bonds mature in 10
Park Corporation is planning to issue bonds with a face value of $2,300,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Required 1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Answer is not complete. No Date General Journal Debit Credit 2,300,000 17 January 01 Cash Premium on bonds payable Bonds payable 2,300,017 2. Prepare the journal entry to record the interest payment on June 30 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answer to whole dollars.) Answer is not complete No Date General Journal Debit Credit June 30 Interest expense 97,7510 Cash 97,750 Discount on bonds payable
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