(Accounting for bonds, LO 4) On June 1, 2006 Joffre Inc. (Joffre) issued a

$2,000,000, 10-year bond with a 10% coupon rate. Proceeds from the bond issue were $2,200,000. Interest is to be paid annually on May 31. Joffre’s year end is December 31. Assume that Joffre uses the straight-line method to amortize any bond premiums or discounts.

Required:

a. Prepare the journal entry to record the issue of the bond on June 1, 2006.

b. Prepare the journal entry to accrue the interest expense on December 31, 2006.

c. Prepare the journal entry to record the payment of interest to bondholders on May 31, 2007.