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Problem IV (16 points) On January 1, Y5, bonds with a $6,000,000 face value are issued for $4,900,000. These bonds pay interest on June
Problem IV (16 points) On January 1, Y5, bonds with a $6,000,000 face value are issued for $4,900,000. These bonds pay interest on June 30 and January 1. They are 15-year bonds with a stated annual interest rate of 6%. On November 30, Y5, $4,500,000 face value of the bonds are redeemed at 95. These bondholders are also paid interest to this date. Please record the following: 1. The issuance of the bonds on January 1, Y5. 2. The June 30, Y5 interest payment (use straight-line method). 3. The payment of interest to bondholders whose bonds were redeemed on November 30, Y5. 4. The redemption of the bonds on November 30, Y5. Instructions: Please prepare journal entries for the above transactions. For credit, clearly show all computations. Check figure: The redemption on November 30 results in a $549,585 loss.
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