Response to the following :
Use the same information in problem 1, except assume that the bonds are sold for $318,000. Prepare the journal entries to record the issuance on April 1 and the first interest payment on October 1. Use the straight-line method to amortize the premium.
Problem 1:
The Bailey Corporation issued 5-year, 11% bonds with a face value of $300,000 on April 1 for $288,000. Interest is paid semiannually at October 1 and April 1. Prepare the journal entries to record the issuance on April 1 and the first interest payment on October 1. Use the straight-line method to amortize the discount.