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Question 1 On January 1, 2020, Vaughn Manufacturing issued $5800000, 10-year, 4% bonds at 102. Interest is payable annually o
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Answer #1

In this case bond should be issued at $102 i.e at premium Hence:-

Cash – Dr $5916000

Bonds Payable-Cr $5800000

Premium on Bonds Payable-Cr $116000

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