A company issued 9%,10-year bonds with a par value of $1,000,000 on September 1,2010 when the market rate was 9%.The bonds were dated June 30,2010.The bond issue price included accrued interest.Interest is paid semiannually on December 31 and June 30.
(a)Prepare the issuer's journal entry to record the issuance of the bonds.
(b)Prepare the issuer's journal entry to record the semiannual interest payment on December 31,2010.

Question

Quizplus · Accepted Answer

(a)
 11ea8a0c_3523_0726_8b44_31e1da9036b5_TB6314_00
 (b)
 11ea8a0c_3523_0727_8b44_7fa95916d491_TB6314_00
 Interest Payment: $1,000,000 x 9% x ½ year = $45,000

A Company Issued 9%,10-Year Bonds with a Par Value of $1,000,000