On January 1, 2010, Fabian Enterprises issued 9%, 10-year bonds with a face amount of $900,000 at 96. Interest is payable semiannually on June 30 and December 31. The bonds were issued for an effective interest rate of 10%.
Instructions: Prepare the entries to record the issuance of the bonds and the first semiannual interest payment.
Question 2
On January 1, 2010, Halston Enterprises issued 8%, 20-year bonds with a face amount of $5,000,000 at 101. Interest is payable semiannually on June 30 and December 31.
Instructions: Prepare the entries to record the issuance of the bonds and the first semiannual interest payment.