Problem
On March 1, 2016, Fever Corporation issues $158,000 of bonds from its January 1, 2016 issue. The bonds mature in 10 years on December 31.2025 and are issued at par. The stated rate on the bonds is 6% and interest is paid semi-annually on June 30 and December 31.
What journal entry should the company make to record the sale of the bonds on March 1, 2016?
What effect does this entry have on the accounting equation?
What journal entry should the company make on June 30, 2016 to record the first interest payment?
What effect does this entry have on the accounting equation?
What journal entry should the company make on December 31, 2016 to record second interest payment?
What effect does this entry have on the accounting equation?