Question - On January 1, 2015, Jasnson Bottle Company sold $100,000 in long-term bonds. The bonds will mature in 5v years and have a stated interest rate of 8% and a yield rate of 6%. Interest is payable each July 1 and January 1. The bonds are accounted under the effective interest method.
a) What amounts were the bonds issued for?
b) Construct an effective interest rate table for the first year (through January 1, 2016)?
c) Prepare the journal entries to be made on July 1, 2015 and December 31, 2105?