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On May 2, 2021, Luka Modric issues 6-year, $1,000,000, 8% bonds to finance the equisiti of a restaurant in Pula, Croatia. The bonds are issued at a price of $1,048,317, for an effective rate of 7%. The bonds pay interest semi-annually, on November 1 and May 1 of each year. Modric's fiscal year-end is on December 31. Prepare all necessary journal entries in relation to these bonds starting on the date of issuance, through May 2, 2022. Clearly mark the date for each journal entry.

On May 2, 2021, Luka Modric issues 6-year, $1,000,000, 8% bonds to finance the equisiti of a restaurant in Pula, Croatia. The bonds are issued at a price of $1,048,317, for an effective rate of 7%. The bonds pay interest semi-annually, on November 1 and May 1 of each year. Modric's fiscal year-end is on December 31. Prepare all necessary journal entries in relation to these bonds starting on the date of issuance, through May 2, 2022. Clearly mark the date for each journal entry.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On May 2, 2021, Luka Modric issues 6-year, $1,000,000, 8% bonds to finance the acquisition of a restaurant in Pula, Croatia. The bonds are issued at a price of $1,048,317, for an effective rate of 7%. The bonds pay interest semi-annually, on November 1 and May 1 of each year. Modric's fiscal year-end is on December 31. Prepare all necessary journal entries in relation to these bonds starting on the date of issuance, through May 2, 2022. Clearly mark the date for each journal entry.
Transcribed Image Text:On May 2, 2021, Luka Modric issues 6-year, $1,000,000, 8% bonds to finance the acquisition of a restaurant in Pula, Croatia. The bonds are issued at a price of $1,048,317, for an effective rate of 7%. The bonds pay interest semi-annually, on November 1 and May 1 of each year. Modric's fiscal year-end is on December 31. Prepare all necessary journal entries in relation to these bonds starting on the date of issuance, through May 2, 2022. Clearly mark the date for each journal entry.
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