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Tingham village issued 500 five year bonds on July 1, 2006. The interest payments are due semi-anually (January 1 and July 1) at an annual

Tingham village issued 500 five year bonds on July 1, 2006. The interest payments are due semi-anually (January 1 and July 1) at an annual rate of 6 percent. The effective interest rate on the bonds is 6 percent. The face value of each bond is $1,000. 1) Prepare the journal entry that would be recorded on July 1, 2006 when the bonds were issued. 2) Prepare the journal entry that would be recorded on December 31, 2006. 3) Compute the balance sheet value of the bond liability as of December 31, 2006. Show calculations when necessary

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