Journal entry to record bond interest accrued

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Reference no: EM1357262

Please explain the following problem. Any examples would be greatly appreciated.

On August 1, 2007, a company issues bonds with a par value of $600,000. The bonds mature in 10 years, and pay 6% annual interest, payable each February 1 and August 1. The bonds sold at $632,000. The company uses the straight-line method of amortizing bond premiums. The company's year-end is December 31. Prepare the general journal entry to record the interest accrued at December 31, 2007.

Reference no: EM1357262

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