BU Curriculum Corporation issued $900,000 of 7% bonds on August 1, 2019, due on August 1, 2024. The interest is to be paid twice a year on February 1 and August 1. The bonds were sold to yield 9% effective annual interest. BU Curriculum Corporation closes its books annually on December 31.

(b) Prepare the journal entries for the following:

1. August 1, 2019 bond issue

2. Adjusting entry for December 31, 2019 (adjusting entry should cover 5 months)

3. February 1, 2020 entry

4. August 1, 2020 entry

5. Adjusting entry from December 31, 2020

Date	Account	Debit	Credit
August 1, 2019	Cash	828,760
August 1, 2019	Discount on Bonds Payable	71,240
August 1, 2019	Bonds Payable		900,000
	Issuance of Bonds
December 31, 2019	Interest Expense	12,431
December 31, 2019	Bond Disc		1,931
December 31, 2019	Discount on Bonds		10,500
	Adjusting Entry

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