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On July 1, 2020 Starhealth Limited issued bonds with a face value of $880,000 due in...

On July 1, 2020 Starhealth Limited issued bonds with a face value of $880,000 due in 20 years, paying interest at a face rate of 6% on January 1 and July 1 each year. The bonds were issued to yield 9%. The company’s year-end was September 30. The company used the effective interest method of amortization. Prepare the journal entry on January 1, 2021 when the company makes the first payment of interest on the bonds. ( There should be four account titles for the entry with the explanation and show all the calculations.) HINT: Use the factor tables for present value annuity factor and present value interest factor.

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