A company issued 14 5-year bonds with a par value of

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A company issued 14%, 5-year bonds with a par value of $5,000,000 on January 1, 2003. Interest is to be paid seminannually on June 30 an December 31. The bonds are issued for $5,368,035 cash when the market interest rate for this bond was 12%.

*The company uses the effective interest method of amortization of any discount or premium on bonds.

*Prepare the journal entries

(a) to record the issuance of this company's bonds

(b) the first semiannual interest payment of June 30, and

Reference no: EM13568308

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