Recording the Issuance and Interest Payments of a Bond Issued at a Discount (Straight-Line Amortization without a Discount Account) LO10-4

Wefald Company sold bonds with a face value of $695,000 for $637,000. The bonds have a coupon rate of 8 percent, mature in 10 years, and pay interest semiannually every June 30 and December 31.

All of the bonds were sold on January 1 of this year. Record the sale of the bonds on January 1 and the payment of interest on June 30 of this year, without the use of a discount account. Wefald uses the straight-line amortization method.