On May 1, 2012, Noah Unlimited issues 9%, 20-year bonds payable with a maturity value of $20,000. The bonds sell at 103 and pay interest on May 1 and November 1. Noah Unlimited amortizes bond premium by the straight-line method.
Requirements
1. Journal the issuance of the bonds on May 1, 2012.
2. Journalize the semiannual interest payment and amortization of bond premium on November 1, 2012.
3. Journalize the interest accrual needed on December 31, 2012.
4. Journalize the interest payment on May 1, 2013.