On January 1, 2019, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2019.
On January 1, 2019, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2019. The bonds pay interest annually on December 31. The bonds were issued to yield 7%. Bond issue costs associated with the bonds totaled $22,107.40.
Required:
| Prepare the journal entries to record the following: |
| January 1, 2019 | Sold the bonds at an effective rate of 7% |
| December 31, 2019 | First interest payment using the effective interest method |
| December 31, 2019 | Amortization of bond issue costs using the straight-line method |
| December 31, 2020 | Second interest payment using the effective interest method |
| December 31, 2020 | Amortization of bond issue costs using the straight-line method |
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On January 1, 2019, Knorr Corporation issued $1,400,000 of 6%, 5-year bonds dated January 1, 2019.
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