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Prepare the journal entry to record the issuance of bonds

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Reference no: EM133102318

Question - Wildhorse Corporation issued $490,000, 8%, 20-year bonds on January 1, 2020, for $445,268. This price resulted in an effective-interest rate of 9% on the bonds. Interest is payable annually on January 1. Wildhorse uses the effective-interest method to amortize bond premium or discount.

Required -

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

(b) Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2020.

Reference no: EM133102318

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