On July 1, 2009, the Nicholsen Corporation issued $300,000 of bonds, with a 13% face rate of interest, for $318,000. The bonds pay interest semiannually on each January 1 and July 1 and are to be repaid in three equal semiannual installments beginning July 1, 2011. Assume the company's fiscal year ends May 31 and it makes reversing entries for year end accruals.
Required:
Prepare the journal entries to account for this serial bond issue on each of the following dates, using the bonds outstanding method of amortization:
1. July 1, 2009
2. January 1, 2010
3. July 1, 2010
4. January 1, 2011
5. July 1, 2011
6. January 1, 2012
7. July 1, 2012