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Prepare the journal entries to record the first two interest

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Question - The Windy City Company issued $500,000 of 12% bonds on January 1, 2016. The bonds were sold for $549,493, and they were expected to yield 10% interest compounded semiannually. The interest dates are June 30 and December 31. The maturity date of the bonds is December 31, 2022.

Required -

a. Prepare the journal entry to record the issuance of the bonds.

b. Using the effective interest method, prepare the journal entries to record the first two interest payments.

Reference no: EM132869878

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