Prepare journal entry for issuance of the bonds

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Reference no: EM131264572

On January 1, 2015 American Omni Company issues bonds dated January 1, 2015 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9% and the market rate is 8%, and interest is paid semiannually on June 30 and December 31. Required: 1) Price the bonds. 2) Prepare journal entry for issuance of the bonds. 3) Prepare the journal entry for the June 30, 2015 interest payment using the straight line method. 4) Prepare the journal entry for the June 30, 2015 interest payment using the effective interest method.

Reference no: EM131264572

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Prepare journal entry for issuance of the bonds : On January 1, 2015 American Omni Company issues bonds dated January 1, 2015 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9% and the market rate is 8%, and interest is paid semiannually on June 30 and December 31. Pr..

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