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Question
On the first day of the current fiscal year, $2,000,000 of 7%, 10-year bonds, with interest payable annually, were sold for $2,125,000. Journalize the following transactions for the current fiscal year:
a. Issuance of the bonds.
b. First annual interest payment (record as a separate entry from premium amortization).
c. Amortization of bond premium for the year, using the straight-line method of amortization.
Answer
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