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Question 3: (5 Marks) On January 1st, 2017, ABC company issued 3 years $400,000, 10% bonds at 105. The interest is paid annually on December
Question 3: (5 Marks) On January 1st, 2017, ABC company issued 3 years $400,000, 10% bonds at 105. The interest is paid annually on December 31st each year. These bonds were issued to yield 8%. The company prepares its financial statements semiannually on June 30 and December 31st each year, and uses the effective interest method. Required: 1- Compute the issue price of the bonds. 2- Prepare the journal entries for the issuance on January 1st 2017. 3- Construct the bond amortization table for the first 2 years. 4- Prepare the journal entries on June 30, 2017, December 31st, 2017
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