(Solution) - On January 1 2012 Buchheit Enterprises reported 95 000 in a -(2025 Original AI-Free Solution)

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On January 1, 2012, Buchheit Enterprises reported $95,000 in a liability called "Bonds Payable, Net." This liability related to a $100,000 bond with a stated interest rate of 5 percent that was issued when the market interest rate was 6 percent. Assuming that interest is paid December 31 each year, prepare the journal entry to record interest paid on December 31, 2012, using the simplified effective-interest method shown in chapter supplement 10C.