Response to the following problem:
Consider the following information:
2015
Jun. 1 Zenith Manufacturing Company Limited received authorization to issue $8,000,000 3-year, 12-per cent bonds. The interest is to be paid semi-annually
June 1 and December 1 of each year.
Jun. 1 Issued $4,000,000 of bonds for $4,142,800 cash.
2016
Sep. 1 Issued another $4,000,000 of bonds at 97.76 plus accrued interest.
The year-end of Zenith is December 31.
Required: Prepare the journal entries to record:
1. The issue of the bonds on June 1, 2015;
2. The payment of bond interest expense on December 1, 2015;
3. The accrual of bond interest expense and recording of amortization
at year-end on December 31, 2015;
4. The payment of bond interest expense on June 1, 2016;
5. The issue of bonds on September 1, 2016; and
6. The final interest payment, premium and discount amortization, and retirement of the bonds at maturity, June 1, 2018.