Aggie company issued 5 - year bonds with a par value of $35,000,000 and a 7% annual stated rate of interest on January 2, 2013. The issue price of the bond issue was $35,216,127 which reflected a 6.85% effective interest rate. Interest payments are made annually. Any premiums or discounts should be amortized using the straight line method.
Record the issuance of the bonds.
Record interest expense at December 31,2013.
Record the interest paid to the bondholders on January 2,2014.
Record interest expense at December 31,2014.