Question - Patton issues $650,000 of 5.0%, four-year bonds dated January 1, 2011, that pay interest semiannually on June 30 and December 31. They are issued at $584,361 and their market rate is 8% at the issue date.
1. Prepare the January 1, 2011, journal entry to record the bonds' issuance.
2. Determine the total bond interest expense to be recognized over the bonds' life.
3. Prepare a straight-line amortization table for the bonds' first two years.
4. Prepare the journal entries to record the first two interest payments.