Question

On 1st Jan., 2015, PC Company sold 10% bonds having a maturity value of $400,000 for $ 453,681, which provides the bondholders with a 8% yield. The bonds are dated January 1st 2015, and mature January 1st 2024, with interest payable January 1st of each year.

Instructions:-

a) Prepare the journal entry at the date of the bond issuance.

b) "Prepare a" schedule of interest expense and bond amortization for 2015 - 2024.

c) Prepare the journal entry to record the interest payment and the amortization for 2015.

d) Prepare the journal entry to record the interest payment and the amortization for 2024.