Solved: Interest is paid semiannually on june 30 and december 31, Accounting Basics

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Interest is paid semiannually on june 30 and december 31

Question - On January 1, 2016, Bishop Company issued 12% bonds dated January 1, 2016 with a face amount of $100000. The bonds mature in 2020 (5 yrs). For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semiannually on June 30 and December 31.

Required:

1- Determine the price of the bonds at January 1, 2016.

2- Prepare the journal entry to record the bond issuance by Bishop on January 1, 2016.

3- Prepare the journal entry to record interest on June 30, 2016 using the straight line method.

4- Prepare the journal entry to record interest on December 31, 2016 using the straight line method.

Please show how to solve it.

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Accounting Basics: Interest is paid semiannually on june 30 and december 31

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Accounting Basics: Interest is paid semiannually on june 30 and december 31

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