Question

The Gorman Group issued $840,000 of 11% bonds on June 30, 2013, for $912,072. The bonds were dated on June 30 and mature on June 30, 2033 (20 years). The market yield for bonds of similar risk and maturity is 10%. Interest is paid semiannually on December 31 and June 30.

   

Required:

Complete the below table to record the company's journal entry. (Enter interest rate to 1 decimal place.) December 31, 2013 Amount Interest Rate Total Interest expense Cash Amortization of premium on bonds June 30, 2014 Amount Interest Rate Total Interest expense Cash Amortization of premium on bonds

1.	Prepare the journal entry to record their issuance by The Gorman Group on June 30, 2013. (If no entry is required for a transaction, select "No journal entry required" in the first account field.)
2.	Prepare the journal entry to record interest on December 31, 2013 (at the effective rate). (If no entry is required for a transaction, select "No journal entry required" in the first account field.)
3.	Prepare the journal entry to record interest on June 30, 2014 (at the effective rate). (If no entry is required for a transaction, select "No journal entry required" in the first account field.)

Answer 1