Zero Coupon Bonds

Concept: Issuing Zero Coupon Bonds

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Concept: Zero Coupon Bonds: Repaying Principal at Maturity

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Problem: On January 1, ABC Company issues $1,000,000 of zero coupon bonds at 75. The bonds mature in five years. Assuming that ABC uses the straight-line method for amortization of bond premiums and discounts, the journal entry at the end of the first year would include:

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