Prepare the journal entry to record the issuance of the bond

Reference no: EM13684641

Venezuela Co. is building a new hockey arena at a cost of $2,509,000. It received a downpayment of $511,700 from local businesses to support the project, and now needs to borrow $1,997,300 to complete the project. It therefore decides to issue $1,997,300 of 10%, 10 year bonds. These bonds were issued on January 1, 2013, and pay interest annually on each January 1. The bonds yield 9%. Venezuela paid $62,800 in bond issue costs related to the bond sale.

(a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 2013.

Reference no: EM13684641

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