Problem
On January 1, Murphy, Inc., issues 7 percent, 20-year bonds with a face value of exist650,000 at 96. Interest is payable on June 30 and December 31.
Journalize the following entries:
a. Issuance of the bonds.
b. Payment of semiannual interest on June 30 and December 31.
c. Adjusting entry to amortize the discount on December 31, the companys year end.