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Prepare journal entries to record the payment of interest

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Question - Foreman Company issued $864,000 of 10%, 20-year bonds on January 1, 2011, at 102. Interest is payable semiannually on July 1 and January 1. Foreman Company uses the effective interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%.

Prepare the journal entries to record the following. (Round all intermediate calculations and answers to 0 decimal places, e.g. 5,510.

(a) The issuance of the bonds.

(b) The payment of interest and the related amortization on July 1, 2011.

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

Reference no: EM131788050

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