Question - Bridgeport Company issued $624,000 of 10%, 20-year bonds on January 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. Bridgeport Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%.
Prepare the journal entries to record the following.
(a) The issuance of bonds
(b) The payment of interest and related amortization on July 1, 2017
(c) The accrual of interest and the related amortization on December 31, 2017