On January 1 of this year, Clearwater Corporation sold bonds with a face value of $750,000 and a coupon rate of 8%. The bonds mature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and also uses a discount account. Assume an annual market rate of interest of 9%.
1. Prepare the journal entry to record the issuance of the bonds.
2. Prepare the journal entry to record the interest payment on December 31 of this year.
3. How will the bonds be reported on Clearwater's December 31 Balance Sheet?
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On January 1 of this year, Clearwater Corporation sold bonds with a face value of $750,000 and a cou...
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