Question: Designer Clothes Inc issued 200 000 10 10 year bonds on July
Designer Clothes, Inc., issued $200,000, 10%, 10-year bonds on July 1, 2011, when the market rate of interest was 8%. Interest is payable annually on July 1. Proceeds from the bond issue were approximately $226,840.33. Designer uses the effective interest method to amortize bond premiums and discounts. Prepare an amortization schedule for the life of the bonds.
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