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X Company issued at par 4-year term bonds with a par value of $100,000, dated January 1, 2020, and bearing interest at an annual rate
X Company issued at par 4-year term bonds with a par value of $100,000, dated January 1, 2020, and bearing interest at an annual rate of 6 percent payable annually on December 31. At the time of issue, the market rate for such bonds is 9 percent. X amortizes the discount or premium using effective interest rate method.
Required:
1- Compute the selling price of bond.
2- Record the journal entry.
3- Prepare schedual of amortization.
4- Record the adjusting entries for all years.
5- Record the jornal entry of paying the principle at the end of period.
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