On January 1, Prescott, Corp., issues 5%, 15-year bonds payable with a maturity value of $130,000. The

Question:

On January 1, Prescott, Corp., issues 5%, 15-year bonds payable with a maturity value of $130,000. The bonds sell at 94 and pay interest on January 1 and July 1. Prescott, Corp., amortizes any bond discount or premium by the straight-line method.

Requirements

1. Record the issuance of the bonds on January 1.

2. Record the semiannual interest payment and amortization of any bond discount

or premium on July 1 .

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...