Osage Corporation issued $600,000, 7%, 10-year bonds on January 1, 2010, for $559,740. This price resulted in

Question:

Osage issued $600,000, 7%, 10-year bonds on January 1, 2010, for $559,740. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Osage uses the effective-interest method to amortize bond premium or discount.
Instructions
Prepare the journal entries to record (round to the nearest dollar):
(a) The issuance of the bonds.
(b) The accrual of interest and the discount amortization on December 31, 2010.
(c) The payment of interest on January 1, 2011.

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...