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Discuss effective-interest method of bond amortization

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Presented below is the partial bond discount amortization schedule for Syam Corp., which uses the effective-interest method of amortization.

Use effective-interest method of bond amortization.

Interest Periods

Interest to Be Paid

Interest Expense to Be Recorded

Discount Amortization

Unamortized Discount

Bond Carrying Value

Issue date

$38,609

$961,391

1

$45,000

$48,070

$3,070

35,539

964,461

2

45,000

48,223

3,223

32,316

967,684

1. Give the stated interest rate
2. Give the market interest rate
3. Give the selling price of bonds as a percent of face value
4. Give journal entry to record the sale of bonds
5. Give 1 entry to record interest expense after 6 months.

Reference no: EM131775577

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