Rock Company issued a $1,000,000 bond on January 1, 2014. The bond was dated January 1, 2014, had an 8% stated rate, pays interest annually on December 31, and sold for $924,184 at a time when the market rate of interest was 10%. Rock uses the effective-interest method to account for its bonds.
Required:
Prepare the necessary journal entry for each of the following dates (assuming that no adjusting journal entries have been made during the year):
January 1, 2014
December 31, 2014
December 31, 2015

Question

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The Answer of Rock Company issued a $1,000,000 bond on January 1, 2014. The bond was dated January 1, 2014, had an 8% stated rate, pays interest annually on December 31, and sold for $924,184 at a time when the market rate of interest was 10%. Rock uses the effective-interest method to account for its bonds.
Required:
Prepare the necessary journal entry for each of the following dates (assuming that no adjusting journal entries have been made during the year):
January 1, 2014
December 31, 2014
December 31, 2015

Rock Company Issued a $1,000,000 Bond on January 1, 2014