Question no. 3

Quant Company issued $500,000 of 10%, 20-year bonds on January 1, 2010, at face value. Interest is payable semiannually on July 1 and January 1.

Instructions:

Prepare the journal entries to record the following events.

a. The issuance of the bonds.

b. The payment of interest on July 1, assuming no previous accrual of interest.

c. The accrual of interest on December 31.

d. The redemption of bonds at maturity, assuming interest for the last interest period

has been paid and recorded.