On March 31, 2007, Star Club, Inc., received authorization to issue $50,000 of 9%, 30-year bonds. Bonds pay interest on March 31 and September 30. The whole issue was dated March 31, 2007, but bonds were not issued until May 31, 2008. They were issued at par.
1) Create the journal entry at May 31, 2007, to record sale of the bonds.
2) Create the journal entry at September 30, 2007, to record the semi-annual bond interest payment.
3) Create the adjusting entry at December 31, 2007, to record bond interest expense accrued since September 30, 2007. (Suppose that no monthly adjusting entries to accumulate interest expense had been made previous to December 31, 2007).