Use effective-interest amortization

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Reference no: EM13790477

On January 1, 2014, Park Corporation sold a $604,000, 10 percent bond issue (12 percent market rate). The company does not use a discount account. The bonds were dated January 1, 2014, pay interest each June 30 and December 31, and mature in five years.

1. Prepare the journal entry to record the interest payment on June 30, 2014. Use effective-interest amortization.

2. Show how the bond interest expense and the bonds payable should be reported on the June 30, 2014, income statement and balance sheet

Reference no: EM13790477

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