On January 1, Company issued $400,000, 7%, 5-year bonds at face value. Interest is payable semiannually on July 1 and January 1.
1 Prepare the journal entry to record the issuance of the bonds
2 Prepare the journal entry to record the payment of interest on July 1, assuming no previous accrual of interest.
3 Prepare the journal entry to record the accrual of interest on December 31.