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Question
On the first day of the fiscal year, Lisbon Co. issued $1,000,000 of 7%, 10-year bonds for $1,050,000, with interest payable semiannually. Journalize the following transactions for the current fiscal year:
a. Issuance of the bonds.
b. Second semiannual interest payment (record as a separate entry from the premium amortization).
c. Amortization of bond premium for the first year, using the straight-line method.
Answer
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