Problem 1 On February 1, 2022, McKinsey Corp. Issued $4,500,000,11%,7 year bonds at face value. The bonds were dated February 1, 2023, and pay interest annually on February 1 . Financial statements are prepared annually on December 31. Instructions: Prepare the journal entry to record the issuance of the bonds Prepare the adjusting entry to record the accrual of interest on December 31, 2022. Show the balance sheet presentation on December 31, 2022. Prepare the journal entry to record payment of interest on February 1, 2023. Prepare the adjusting entry to record the accrual of interest on December 31, 2023. Assume that on January 1, 2024, McKinsey pays the accrued interest and calls the bonds at 103. Record the payment

On February 1, 2022, McKinsey Corp. Issued $4,500,000,11%,7 year bonds at face value. The bonds were dated February 1, 2023, and pay interest annually on February 1. Financial statements are prepared annually on December 31. Instructions: 1. Prepare the journal entry to record the issuance of the bonds 2. Prepare the adjusting entry to record the accrual of interest on December 31, 2022. 3. Show the balance sheet presentation on December 31, 2022. 4. Prepare the journal entry to record payment of interest on February 1, 2023. 5. Prepare the adjusting entry to record the accrual of interest on December 31, 2023. 6. Assume that on January 1, 2024, McKinsey pays the accrued interest and calls the bonds at 103. Record the payment of interest and redemption of the bonds