Accounting for bonds (Learning Objective 5) 15–20 min.

On January 1, Doherty, Corp., issues 5%, 10-year bonds payable with a maturity value of $90,000. The bonds sell at 95 and pay interest on January 1 and July 1. Doherty, Corp., amortizes any bond discount or premium by the straight-line method. Record (a)

the issuance of the bonds on January 1, and

(b) the semiannual interest payment and amortization of any bond discount or premium on July 1.

AppendixLO1