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On the first day of the fiscal year a company issues a $776,000, 10%, 10-year bond that passer interest of $3,000 (1776,000 x
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Answer #1

Bonds premium = $814,800 - $776,000 = $38,800

Bonds premium amortized each period $38,800 / 20 = $1,940

Interest expense $36,860
Bond premium $1,940
Cash $38,800
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