On October 1, 2018, Spooner Corporation issued $800,000 of 10-year, 5% bonds at 100. Interest is payable semi-annually on October 1 and April 1. Spooner's year end is December 31 and the company records adjusting entries annually.
Instructions
(a) Prepare journal entries to record the following:
1. The issue of the bonds on October 1, 2018
2. The accrual of interest on December 31, 2018
3. The payment of interest on April 1, 2019
(b) Identify what amounts, if any, would be reported as a current liability and non-current liability with respect to the bond and bond interest accounts on December 31, 2018.