Moon Company issued $500,000, 10%, 5-year bonds on January 1, 2014, at 106. Interest is payable annually on January 1. Moon uses the effective-interest method of amortization and has a calendar year end and the bonds were issued for an effective interest rate of 8%.
Instructions
Prepare all journal entries made in 2014 related to the bond issue.

Question

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The Answer of Moon Company issued $500,000, 10%, 5-year bonds on January 1, 2014, at 106. Interest is payable annually on January 1. Moon uses the effective-interest method of amortization and has a calendar year end and the bonds were issued for an effective interest rate of 8%.
Instructions
Prepare all journal entries made in 2014 related to the bond issue.

Moon Company Issued $500,000, 10%, 5-Year Bonds on January 1