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Question 1 (22 marks) On January 1, 2021, Company C issued $3.12 million of 7-year 3% bonds at $2,755,244. This price resulted in a 5%
Question 1 (22 marks) On January 1, 2021, Company C issued $3.12 million of 7-year 3% bonds at $2,755,244. This price resulted in a 5% market interest rate on the bonds. Interest is payable semi-annually on January 1 and July 1. Company C has a December 31 year- end. 1. Were the bonds issued at a premium or a discount? Why? (2 marks) 2. Prepare an amortization schedule for the first three interest payments. (12 marks) 3. Prepare the journal entry to record the first interest payment on July 1, 2021. (3 marks) 4. Prepare the journal entry to record the accrual of interest on December 31, 2021. (3 marks) 5. Prepare the journal entry to record the second interest payment on January 1, 2022. (2 marks)
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