On January 1,2016,JetNew,issued $1,000,000 face value,5-year bonds with a stated rate of 5% at an effective rate of 4% which brought in $1,044,913.Interest is paid semi-annually on July 1 and December 31.JetNew uses the effective-interest method of amortization.
Prepare entries for the following transactions:
a.Issuance of the bonds on January 1,2016.
b.Payment of interest and amortization of discount or premium on July 1,2016.

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The Answer of On January 1,2016,JetNew,issued $1,000,000 face value,5-year bonds with a stated rate of 5% at an effective rate of 4% which brought in $1,044,913.Interest is paid semi-annually on July 1 and December 31.JetNew uses the effective-interest method of amortization.
Prepare entries for the following transactions:
a.Issuance of the bonds on January 1,2016.
b.Payment of interest and amortization of discount or premium on July 1,2016.

On January 1,2016,JetNew,issued $1,000,000 Face Value,5-Year Bonds with a Stated