On April 1, 2016, Western Communications, Inc., issued 12% bonds, dated March 1,, 20 1 6, with face amount of $30 million. The bonds sold
On April 1, 2016, Western Communications, Inc., issued 12% bonds, dated March 1,, 20 1 6, with face amount of $30 million. The bonds sold for $29.3 million and mature on February 28, 2019. Interest is paid semiannually on August 31 and February 28. Stillworth Corporation acquired $30,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31, and both firms use the straight-line method.
Required: I . Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth's investment on April 1I , 2016.
2. Prepare the journal entries by both firms to record all subsequent events related to the bonds through maturity.
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