Prepare the journal entry to record the interest

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On January 1, 2010, Branson Designers issued $900 Million of its 8% bonds $836 million. The bonds were then prices to yield 10%. The interest will be payable on June 30 and December 31. Branson records interest as the effective rate and thus is going to report the bonds at face value. On December 31, 2010 the fair value of the bonds was $852 Million as determined by the market.

Prepare the journal entry to record the interest at June 30, 2010, and December 31, 2010.

Reference no: EM13125530

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