Question
On January 1, 2017, Borse Company issued 7.5%, 5-year bonds with a face value of $1,200,000. The bonds pay interest semi-annually on July 1 and
On January 1, 2017, Borse Company issued 7.5%, 5-year bonds with a face value of $1,200,000. The bonds pay interest semi-annually on July 1 and January 1. Fiscal year end is December 31. Instructions b. Assuming the bonds are issued at 103, [1] prepare journal entries to record the (a) issuance of the bonds, (b) accrual of interest and amortization and December 31, 2017 and 2018, and (c) payment of the interest on July 1, 2017 and 2018, on January 1, 2018, and on January 1, 2019. [2] Illustrate how the bonds AND related accounts would be reported on the December 31 balance sheet for 2017 and 2018.
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