Question:
BondsRus, Inc issued 10 year semi-annual bonds on January 1, 2014 at 103 with a face amount of $400,000 and a coupon rate of 7%. They use the straight-line method to calculate interest expense.
Required:
1. Prepare the journal entry for the bond issuance by BondsRus, Inc on January1, 2014.
2. Provide the carrying amount on the balance sheet for BondsRus for this issuance on December 31, 2016.
3. Provide the journal entry for the June 30, 2014 and December 31, 2014 interest payments.