Question - ABC Corporation issued $200,000 of 10-year, 4% bonds on March 1, 200X. The bonds sold for $210,000. Interest is payable semiannually. The company uses straight-line amortization for bond discounts and premiums. Prepare the following journal entries:
a. The issuance of the bonds on March 1
b. The semiannual interest payment entry and entry to record amortization
Question - The XYZ Corporation issued $600,000 of 5-year, 3% bonds on October 1, 200X. The bonds pay interest semiannually. The bonds sold for $585,000 on October 1. The company uses straight-line amortization for bond discounts and premiums. Prepare the following journal entries:
a. The issuance of the bonds on October 1
b. The semiannual interest payment entry and entry to record amortization.