Part 3

On January 1, 2011, Power Corporation issued $800,000, 5%, 5-year bonds dated January 1, 2011, at 95. The bonds pay annual interest on January 1. The company uses the straight-line method of amortization and has a calendar year end. Prepare all the Journal entries that Powell Corporation would make related to this Issue through January 1, 2012. Be sure to indicate the date on which the entries would be made. Issuance of bonds Dec. 31 Interest and amortization Payment of interest on January 1, 2012