On July 1, 2001, the Romero Corp. issued $400,000, 10 percent bonds for $430,924. Interest is payable on January 1 and July 1; the bond matures in 2006. The market rate for this type of bond is 8 percent.
Prepare the journal entries to record the sale of the bonds, any adjusting entries, and the payment of the interest through December 31, 2003, using the effective interest method.
Prepare the journal entries using the straight-line method