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    Preparing the Appropriate Journal Entries

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    12. Neutron Company issued $1,500,000, 10%, 20-year bonds on December 31, 2005, for $1,460,000. Interest is payable semiannually on June 30 and December 31. Neutron uses the straight-line method of amortization and has a calendar year end.

    Prepare the appropriate journal entries on:
    (a) December 31, 2005.
    (b) June 30, 2006.

    See the attached file.

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    Solution Summary

    The solution prepares the appropriate journal entries.