Problem
AP On September 1, 2024, Praise Corporation issued $600,000 of 10-year, 3% bonds at 96. Interest is payable semi-annually on September 1 and March 1. Praise's fiscal year end is February 28.
Task
1) Is the market rate of interest higher or lower than 3%? Explain.
2) Record the issue of the bonds on September 1, 2024.
3) Record the accrual of interest on February 28, 2025, assuming the semi-annual amortization amount for this interest period is $1,014.
4) Record the payment of interest on March 1, 2025.
5) Record bond transactions.