Issuance of Bonds}

H. Simpson Company is an entertainment company located in Springfield, Illinois. H. Simpson recently issued \(\$ 200,000\) of bonds to finance large expenditures for an upcoming television production. H. Simpson received cash of \(\$ 194,620\) upon the issuance of the bonds and plans to pay interest semiannually.

\section*{Required:}

1. Prepare the necessary journal entry to record the issuance of the bonds.

2. Is the stated rate greater or less than the yield? How do you know?

OBJECTIVE 2 Brief Exercise