Bonds Payable - Issued "plus accrued interest ".
Trump Company issued $200,000 of bonds payable at face value on March 1, 2016. The bonds were authorized on January 1, 2016, with a stated rate of 3% and a maturity date of December 31, 2025. Interest payments are to be made annually, starting December 31, 2016. Because the authorization date preceded the issue date, the bonds were issued "plus accrued interest." Prepare the following journal entries.
Note, there are two different ways to handle the accrued interest, but be consistent between Part A and Part B.
A. The issue of the bonds at March 1, 2016, plus accrued interest.
B. The payment of the first interest payment on December 31, 2016.