Discussion:
Q: BONDS ISSUED AT A DISCOUNT Brenner's Home Club issued the following bonds at a discount:
Date of issue and sale: ........................April 1, 20-1
Principal amount: ..............................$500,000
Sale price of bonds: ...........................98
Denomination of bonds: ......................$1,000
Life of bonds: ..................................10 years
Stated rate: ..................................... 7%, payable semiannually on
.....................................................September 30 and March 31
Prepare journal entries for:
(a) Issuance of the bonds at a discount.
(b) Interest payment and discount amortization on the bonds on September 30.
(c) Year-end adjustment on the bonds.