On March 1, 2011, Brown-Ferring Corporation issued $100 million of 12% bonds, dated January 1, 2011, for $99 million (plus accrued interest). The bonds mature on December 31, 2030, and pay interest semiannually on June 30 and December 31. Brown-Ferring's fiscal period is the calendar year.
Required:
1. Determine the amount of accrued interest that was included in the proceeds received from the bond sale.
2. Prepare the journal entry for the issuance of the bonds by Brown-Ferring.