Prepare the journal entries to record Stillworth Investment

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Question - On April 1, 2021, Western Communications, Inc., Issued 12% bonds, dated March 1, 2021, with face amount of $46 million. The bonds sold for $45.3 million and mature on February 28, 2024. Interest is paid semiannually on August 31 and February 28. Stillworth Corporation acquired $46,000 of the bonds as a long-term Investment. The fiscal years of both firms end December 31, and both firms use the straight-line method.

Required -

1. Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth's Investment on April 1, 2021.

2. Prepare the journal entries by both firms to record all subsequent events related to the bonds through maturity.

Reference no: EM133123366

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