Since the club opened, a major concern has been the pool facilities. Although the exist- ing pool is adequate, Mindy, Oscar, and Lori all desire to make LifePath a cutting-edge facility. Until the end of 2012, financing concerns prevented this improvement. However, because there has been steady growth in clientele, revenue, and income since the fourth quarter of 2012, the owners have explored possible financing options. They are hesitant to issue stock and change the ownership mix because they have been able to work together as a team with great effectiveness. They have formulated a plan to issue secured term bonds to raise the needed $600,000 for the pool facilities. By the end of April 2013, everything was in place for the bond issue to go ahead. On June 1, 2013, the bonds were issued for $548,000. The bonds pay semiannual interest of 3% on December 1 and June 1 of each year. The bonds mature in 10 years, and amorti- zation is computed using the straight-line method.
Instructions
Record the issuance of the secured bonds, the interest payment made on December 1, 2013, the adjusting entry required at December 31, 2013, and the interest payment made on June 1, 2014.