On October 1, 2019, Ball Company issued 6% bonds dated October 1, 2019, with a face amount of $210,000. The bonds mature in 9 years. Interest is paid semiannually on March 31 and September 30. The proceeds from the bond issuance were $218,888.62 to yield 5.40%. Ball Company has a December 31 fiscal year-end and does not use reversing entries. Required: 1. Prepare journal entries to record the issuance of the bonds and the interest payments for 2019 and 2020 using the effective interest method. 2. Prepare journal entries t

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On October 1, 2019, Ball Company issued 6% bonds dated October 1, 2019, with a face amount of $210,000. The bonds mature in 9 years. Interest is paid semiannually on March 31 and September 30. The proceeds from the bond issuance were $218,888.62 to yield 5.40%. Ball Company has a December 31 fiscal year-end and does not use reversing entries.
Required:
1. Prepare journal entries to record the issuance of the bonds and the interest payments for 2019 and 2020 using the effective interest method.
2. Prepare journal entries to record the issuance of the bonds and the interest payments for 2019 and 2020 using the straight-line method.
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