1. On January 1, 2016, Maverick Enterprises issued 11%, 5-year bonds with a face amount of $900,000 at par. Interest is payable semiannually on July 1 and January 1.

INSTRUCTIONS

Prepare the entries to record the issuance of the bonds and the interest of 2016.

2. Clay Corporation issued $800,000, 10%, 20-year bonds on January 1, 2016. Interest is payable semiannually on July 1 and January 1. Sapoconcho uses the straight-line method of amortization and has a calendar year end.

INSTRUCTIONS

Prepare all journal entries made 2016 a) assuming the bonds are issued at 97. b) assuming the bonds are issued at 104.