On January 1 of the current fiscal year, Block Co. issued $1,000.000 of 10 year, 10% bonds. The bonds were dated January 1 of the same year. Interest on the bonds is payable on June 30 and December 31 of each year.

Record the transactions (omit explanations and round to nearest dollar)

1) The bonds were sold for $885,295 on January 1 of the current year. The market rate of interest on that date was 12%.

2.) Interest was paid in June 30, and the related amount of bond discount was amortized, based on the straight line method.

3.) Interest was paid on December 31, and the related amount of the bond discount was amortized, based on the straight line method.

4.) On December 31 (bonds are one year old), one-half of the bonds were redeemed at 98.

JOURNAL

DATE DESCRIPTION DEBIT CREDIT