Problem
On January 1 of this year, Clearwater Corporation sold bonds with a face value of $900,000 and a coupon rate of 9 percent. The bonds mature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and does not use a discount account. Assume an annual market rate of interest of 10 percent. ( i am confused about the "does not use a discount account" part as well and this is all the info the question gives)
Prepare the journal entry to record the issuance of the bonds.
Prepare the journal entry to record the interest payment on December 31 of this year?
What bonds payable amount will Clearwater report on its December 31 balance sheet?