Response to the following problem:
A 3-year $1,000,000, 10% bond issue was authorized for Mega Corporation on April 1, 2015. Interest is payable on March 31 and September 30. The year-end of the Corporation is December 31.
Required: Consider the following independent cases:
1. The Mega Corporation issued the bonds on April 1, 2015 at 97. Prepare the journal entries required on April 1, 2015, September 30, 2015, and December 31, 2015. Assume straight-line amortization.
2. The bonds are issued at 106 on April 1, 2015. Prepare the journal entries to record the sale of the bonds on April 1, 2015 and entries required on September 30, 2015 and December 31, 2015.
3. The bonds are not issued until December 1, 2016 at 103 plus accrued interest. Prepare the journal entries on December 1, 2016 and December 31, 2016 (year-end). Assume straight-line amortization.