a).Prepare the journal entry to record the sale of these bonds on January 1, 2010. b).Prepare the journal entry to record the first interest payment on July 1, 2010 (interest payable semiannually), assuming no previous accrual of interest. Prepare the adjusting journal entry on December 31, 2010, to record interest expense.
Pruitt Corporation issued 3,000, 8%, 5-year, $1,000 bonds dated January 1, 2010, at 100 (i.e. at 100% of face or par value).
(Note: 3,000 bonds have been issued each having a face value of $1,000. So basically, the total liability of $3,000,000 will be created i.e. 3000 x 1000 = 3,000,000. Similarly, interest payment will also be on total amount)
a).Prepare the
b).Prepare the journal entry to record the first interest payment on July 1, 2010 (interest payable semiannually), assuming no previous accrual of interest.
Prepare the
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