Blue Sky Travel Inc.issues $2,000,000 of ten-year,8% bonds dated January 1,2012.Interest is payable on January 1 and July I each year.The proceeds realized from the issue were the $1,821,367 sales price less the $20,000 fee charged by Blue Sky's investment bank.Blue Sky's year-end is December 31.
Requirement:
Prepare journal entries:
a.The issuance of the bonds.
b.Payment of interest and related amortization on July 1,2012.
c.Accrual of interest and related amortization on December 31,2012.

Question

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The Answer of Blue Sky Travel Inc.issues $2,000,000 of ten-year,8% bonds dated January 1,2012.Interest is payable on January 1 and July I each year.The proceeds realized from the issue were the $1,821,367 sales price less the $20,000 fee charged by Blue Sky's investment bank.Blue Sky's year-end is December 31.
Requirement:
Prepare journal entries:
a.The issuance of the bonds.
b.Payment of interest and related amortization on July 1,2012.
c.Accrual of interest and related amortization on December 31,2012.