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Make the journal entry to record this bond issue

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Question - Bonds Payable - Assume that on January 2, 2020, the Valenzuela Corporation issues P1,000,000, 5-year term bonds with a stated interest rate of 12%. The bonds pay interest every January 2 and July 1. The bonds were issued to yield 12%, which is another way of saying that they were issued at par, and thus the company received the full P1,000,000. The next interest payment is due on January 2, 2021. The corporation's year-end is December 31, and the firm must make an adjusting entry to record interest expense for the six-month period, July 1 to December 31.

Required -

1. Make the journal entry to record this bond issue?

2. Make the journal entry to record required annual interest payment of 6%?

3. Make the adjusting entry and the entry to record the subsequent payment?

Reference no: EM133175039

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