Exercise 1:

On January 1, 2019, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were issued for $559,224, and pay interest each July 1 and January 1. Assume an effective-interest rate of 8%.

Required: Prepare the companys journal entries for

1- The January 1 issuance. 2- The July 1 interest payment.

3- The Dec 31 adjusting entry.

Exercise 2:

On January 1, 2019, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were issued for $644,636, and pay interest each July 1 and January 1. Assume an effective-interest rate of 6%.

Required: Prepare the companys journal entries for

1- The January 1 issuance. 2- The July 1 interest payment.

3- The Dec 31 adjusting entry.