Risko corporation incorporated on January 1st 2011. Brand new company in need for cash decided to issue callable bonds. On April 1st, 2011 Risko Corporation sold 10,000 number bonds, each has a face value of $1,000, 11%, 15-year, to yield 12%. (Bonds issuedon the same day they are printed)
Interest payment dates are April 1st and October 1st, and the company uses the effective interest rate method of amortization. The Company's year-end is December 31st.
Prepare the adjusting journal entries for December 31st, 2012 and the interest expense on April 1st 2012 October 1st, 2012.