Prepare the journal entry to record interest on july

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Problem

Johnson Inc issued 20 year, 10% bonds dated February 1, 2016, with a face value amount of $200,000. The bonds were issued on February 1, 2016 and they were sold for $239,588. the effective interest rate for these bonds was 8%. Interest is paid semiannually on July 31 and January 31. the company's fiscal year is the calender year, and the company uses the effective interest method of amortization.

1. Prepare the journal entry to record the bond issuance on February 1, 2016.

2. Prepare the journal entry to record interest on July 31, 2016.

3. Prepare any entries required at December 31, 2016.

Reference no: EM131884738

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