Miller,Inc.sold $1,000,000 of bonds at par on January 1,2016.The 3-year,6% bonds pay interest each year on December 31.Sheets incurred $40,000 in bond issue costs and records transactions using IFRS.
Required:
1.Compute the effective interest rate of the bond issue.
2.Prepare the journal entry to record the bond issuance.

Question

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The Answer of Miller,Inc.sold $1,000,000 of bonds at par on January 1,2016.The 3-year,6% bonds pay interest each year on December 31.Sheets incurred $40,000 in bond issue costs and records transactions using IFRS.
Required:
1.Compute the effective interest rate of the bond issue.
2.Prepare the journal entry to record the bond issuance.