Journal entries-effective interest method

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Calculate the issue price of a $1,500,000 bond issue and prepare the journal entries for the issuance and first years' interest payments (use the effective interest method). Assume the bonds are paid semiannually (June 30 and December 31).

a) A 12 year, 8 percent bond issue, the market interest rate is 12 percent.

b) A 12 year, 8 percent bond issue, the market interest rate is 6 percent.

Reference no: EM1357490

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