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Three-year bond with an 8% coupon rate sold to yield 10% on January 1, 2017. Interest payable annually on December 31. Callable at 105. Face

Three-year bond with an 8% coupon rate sold to yield 10% on January 1, 2017. Interest payable annually on December 31. Callable at 105. Face value: $100,000. Bond issue costs: $5,000.

Required:

1. Calculation of premium or discount.

2. Recording of bond issuance.

3. Accounting entries.

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