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Effects of a premium bond issue

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Reference no: EM13972922

Recording the Effects of a Premium Bond Issue and First Interest Payment (Effective-Interest Amortization)

Grocery Corporation received $312,341 for $260,000, 11.0 percent bonds issued on January 1, 2008, at a market interest rate of 8.0 percent. The bonds stated the interest would be paid  each December 31 and that they mature on December 31, 2017 and assume Grocery Corporation uses the effective-interest method to amortize the bond premium.

Required:

Prepare the journal entry to record the bond issues.

Reference no: EM13972922

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