Prepare the journal entry to record the issuance of the bond

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On January 1, a company issued 10-year, 10% bonds payable with a par value of $500,000, and received $442, 647 in cash proceeds.

The market rate of interest at the date of issuance was 12%. The bonds pay interest semiannually on July 1 and January 1.

1. What is the amount of the discount on these bonds at issuance?

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

3. What is the total interest expense over the life of the bonds?

4. Show the journal entry that will be used to record the interest payments over the life of the bonds.

Reference no: EM131959238

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