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    Bond entries

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    3. On January 1, Porter Corporation issued $600,000, 6%, 5-year bonds at face value. Interest is payable semiannually on July 1 and January 1.

    Prepare journal entries to record the
    (a) Issuance of the bonds.
    (b) Payment of interest on July 1, assuming no previous accrual of interest.
    (c) Accrual of interest on December 31.

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    Solution Preview

    Please see the attachment
    (a) Since the bonds are issued at face value, the amount received is $600,000. The entry is
    Jan 1 Cash Dr ...

    Solution Summary

    The solution explains the bond entries relating to issuance and interest payments.