On January l of this year, Victor Corporation sold bonds with a face value of $1,400,000 and

Question:

On January l of this year, Victor sold bonds with a of $1,400,000 and a rate of 8 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 6 percent.
Required:
1. Provide the journal entry to record the issuance of the bonds.
2. Provide the journal entry to record the interest payment on December 31 of this year.
3. What bonds payable amount will Victor report on its December 31 balance sheet?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...