Pierce Company issued $220,000, 8%, 10-year bonds on December 31, 2006, for Prepare journal entries to

$215,000. Interest is payable annually on December 31. Pierce uses the straight-line "ecord issuance of bonds, method to amortize bond premium or discount. payment of interest, amortization of discount using straight-line, and redemption at maturity.

(SOS; 6,8)

Instructions Prepare the journal entries to record the following events.

(a) The issuance of the bonds.

(b) The payment of interest and the discount amortization on December 31, 2007.

(c) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.

516 CHAPTER 10 Reporting and Analyzing Liabilities Prepare journal entries for 83. Midas Corporation issued $260,000, 7%, 10-year bonds on January 1, 2007, for issuance of bonds, payment $242,554. This price resulted in an effective interest rate of 8% on the bonds. Interest is of interest, and amortization _ yayable annually on January 1. Midas uses the effective-interest method to amortize bond of discount using effective- premium or discount.

interest method.

(SO 5, 9) 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, 2007.

(c) The payment of interest on January 1, 2008.

Prepare journal entries for