Hrabik corporation issued 600000 9 10-year bonds on january

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Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2011, for $562,613.This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortize bond premium or discount.

Required:

Prepare the journal entries to record the following.

(a) The issuance of the bonds.

(b) The payment of interest and the discount amortization on July 1, 2011, assuming that interest was not accrued on June 30.

(c) The accrual of interest and the discount amortization on December 31, 2011.

Reference no: EM13393776

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