Determine the advantage of lower interest rate

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Question 1: How do I record the issuance of new 5% bonds, and interest expense on 5% bonds at year end 2016?

Point 1: To take advantage of lower interest rates and to finance the redemption of 6% Bonds, on September 1st 2016, GeneralProducts issued 5% Bonds with a face value of $100,000 to yield 6% The maturity period of these 5% Bonds is 10 years and interest is paid semi-annually on Jan 1st and July The proceeds from the issue of 5% Bonds are used to redeem 6% Bonds Payable 101 on September

Reference no: EM132461226

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