1. Company A issued $7,000,000 of a bond on 1-1-x1 for 98 (meaning 98%). The bonds have a 10 year life, stated interest rate of 12%, semiannual interest payments.
2. Company B issued $3,000,000 of a bond on 1-1-x1. Since the market interest rates were lower than the bond interest rate, the bonds were sold for a premium. The company received $3,200,000 for the bonds with a 20 year life, 10%, semiannual interest payments.
A. Journal entry required for the sale of the bond on 1-1-x1
B. Journal entry for the interest payment on 6-30-x1
C. Journal entry for the interest payment on 12-31-x1
REQUIRED:
For each section (1, 2), give the following journal entries.