On August 1, Clayton Co. issued $1,300,000 of 20-year, 9% bonds, dated August 1, for $1,225,000. Interest is payable semiannually on February 1 and August 1. Present the entries to record the following transactions for the current year:
(a)Issuance of the bonds.
(b)Accrual of interest and amortization of bond discount for the first year, on December 31, using the straight-line method. Round to the nearest dollar when necessary.

Question

Quizplus · Accepted Answer

The Answer of On August 1, Clayton Co. issued $1,300,000 of 20-year, 9% bonds, dated August 1, for $1,225,000. Interest is payable semiannually on February 1 and August 1. Present the entries to record the following transactions for the current year:
(a)Issuance of the bonds.
(b)Accrual of interest and amortization of bond discount for the first year, on December 31, using the straight-line method. Round to the nearest dollar when necessary.