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Bonds Payable

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Bonds Payable
Based on the information below, prepare the journal entries for the following:
(1) Issue of the bonds on January 1st.
(2) Payment of the first semi-annual interest installment with cash.
(3) Accrual of the second interest installment on December 31st to be paid on
January 1st.
Face amount of bonds
$500,000
Term of bonds in years
10
Contract interest rate of bonds
10%
Semi-annual rate
5%
Interest payment dates are July 1 and January 1.

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The solution explains the journal entries relating to bond issuance, interest payment and accrual of interest.

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Based on the information below, prepare the journal entries for the following:
(1) Issue of the bonds on January 1st.
(2) Payment of the first semi-annual interest installment with cash.
(3) Accrual of the second interest installment on December 31st to be ...

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