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Question 7.3 On January 31, 2016, Muscle Sports Cars issued 10-year, 4% bonds with a face value of $100,000. The bonds were issued at 94

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Question 7.3 On January 31, 2016, Muscle Sports Cars issued 10-year, 4% bonds with a face value of $100,000. The bonds were issued at 94 and pay interest on January 31 and June 30. Muscle amortizes their bonds by the straight-line method. 1. Record: (a) the issuance of the bonds on January 31, (b) the semi-annual interest payment and discount amortization on June 30, and (c) the interest accrual and discount amortization on December 31. Question 7.4 On June 30, 2016, the market interest rate was 7%. Starship Enterprises issues $500,000 of 8%, 20-year bonds at 110.625. The bonds pay interest on June 30 and December 31. Starship amortizes bonds by the effective-interest method. 1. Record issuance of the bonds on June 30, 2016, the payment of interest on December 31, 2016, and the semi-annual interest payment on June 30, 2017

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