Question - Gridley Company issued $800,000, 11%, 10-year bonds on December 31, 2016, for $730,000. Interest is payable annually on December 31. Gridley Company uses the straight-line method to amortize bond premium or discount.
1. Prepare the journal entry to record the issuance of the bonds.
2. Prepare the journal entry to record the payment of interest and the discount amortization on December 31, 2017.
3. Prepare the journal entry to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.