On January 2,2017,Pannabaker Corporation issued $400,000,five-year,10% bonds when the market rate of interest was 12%.The bonds pay interest semi-annually on July 31 and December 31.Pannabaker Corporation uses the effective-interest method of amortization and has a year-end of December 31.
a_Prepare the journal entry on January 2,2017,to issue the bonds.
b_Prepare the journal entry on July 31,2017,to record the first annual interest payment and the amortization of the premium or discount.

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The Answer of On January 2,2017,Pannabaker Corporation issued $400,000,five-year,10% bonds when the market rate of interest was 12%.The bonds pay interest semi-annually on July 31 and December 31.Pannabaker Corporation uses the effective-interest method of amortization and has a year-end of December 31.
a_Prepare the journal entry on January 2,2017,to issue the bonds.
b_Prepare the journal entry on July 31,2017,to record the first annual interest payment and the amortization of the premium or discount.

On January 2,2017,Pannabaker Corporation Issued $400,000,five-Year,10% Bonds When the Market