Hastings, Corp., issued 6%, five-year bonds payable with a maturity value of ($5,000) at a price of

Question:

Hastings, Corp., issued 6%, five-year bonds payable with a maturity value of $$5,000$ at a price of $$4,570$ when the market rate was 8% on January 1, 2010. Journalize the following transactions for Hastings, Corp. Include an explanation for each entry.

a. Issuance of the bond payable on January 1,2010.

b. Payment of semiannual interest and amortization of bond discount on July 1, 2010. (Use the straight-line method to amortize the discount.)

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