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Prepare journal entries for the bonds issuance

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Question - On January 1, Jordan Inc. issues for cash $100,000 of 8%, five-year bonds with interest payable semiannually. The market rate of interest at the time the bonds are issued is 6%. Assume the bonds sell for $108,530. Assume any premium or discount is amortized on the straight-line basis semiannually.

A. Is the bond issued at a premium, a discount, or neither?

B. Prepare journal entries for the bond's issuance, and the first and second semiannual interest payment.

Reference no: EM132524005

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