Problem:
On 8/1/05, Cardinals Co issued 600 of its $1,000 face value, 6%, 7-year bonds at {106} plus accrued interest. The bonds were authorized on 4/1/05, and pay interest each 4/1 and 10/1. The straight-line method is used to amortize any discount or premium.
Give the journal entry on :
1) 8/1/05, to issue the bond
2) 10/1/05, to make the FIRST interest payment
3) 12/31/05, to adjust for the year end
CLUE MUST MATCH: The Carry Value of bonds at 12/31/06 is $628,350