Prophet Company issued $500,000, 6%, 30-year bonds on January 1, 2014, at 103. Interest is payable annually

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Prophet Company issued $500,000, 6%, 30-year bonds on January 1, 2014, at 103. Interest is payable annually on January 1. Prophet uses straight-line amortization for bond premium or discount.

Instructions Prepare the journal entries to record the following events.

(a) The issuance of the bonds.

(b) The accrual of interest and the premium amortization on December 31, 2014.

(c) The payment of interest on January 1, 2015.

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

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Accounting Tools For Business Decision Making

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Authors: Kimmel, Wetlands, Kieso

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Prophet Company issued $500,000, 6%, 30-year bonds on January 1, 2014, at 103. Interest is payable annually

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