Sheets, Inc. sold $1,000,000 of bonds at 98 on January 1, 2018. The 4-year, 6% bonds pay interest each year on December 31. Sheets incurred $35,000 in bond issue costs using GAAP.
Required: Prepare the journal entries to record the issuance of the bonds and the first annual interest payment.

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The Answer of Sheets, Inc. sold $1,000,000 of bonds at 98 on January 1, 2018. The 4-year, 6% bonds pay interest each year on December 31. Sheets incurred $35,000 in bond issue costs using GAAP.
Required: Prepare the journal entries to record the issuance of the bonds and the first annual interest payment.