Question - On January 1, 2011, Michelin Ratings Corp. issued 8-year bonds with a face value of $500,000 at 104. The bonds carry a stated rate of 6%, payable each June 30 and December 31.
QUESTIONS:
1. Prepare the journal entry to show the issuance of the bonds on January 1, 2011.
2. Prepare the journal entry to show the payment of interest on June 30, 2013.
3. On July 1, 2015, Michelin Ratings Corp. redeems all of the bonds. Prepare the journal entry to show the redemption at 101. (3 points)
SPECIFIC INSTRUCTIONS: For each journal entry, type your response in the following format:
DR (account name) $(amount)
CR (account name) $(amount)
For example, if you are making an entry to debit Cash for $100 and credit Accounts Payable for $100, you would enter the following:
DR Cash $100
CR Accounts Payable $100