Stone 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 $1,084,249 at a time when the market rate of interest was 6%. Stone uses the effective-interest method to account for its bonds.
Required:
Prepare the necessary journal entry for each of the following dates:
January 1, 2014
December 31, 2014
December 31, 2015

Question

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The Answer of Stone 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 $1,084,249 at a time when the market rate of interest was 6%. Stone uses the effective-interest method to account for its bonds.
Required:
Prepare the necessary journal entry for each of the following dates:
January 1, 2014
December 31, 2014
December 31, 2015

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