(Answered) Question - on jan 1 2011 whittington stoves issued 800

Accounting

Question - On Jan. 1, 2011, Whittington Stoves issued $800 million of its 8% bonds for $736 million. The bonds were priced to yield 10%. Interest is payable semi annually on june 30 and December 31. Whittington records interest at the effective rate.

1. Prepare a journal entry to record the bond issuance on Jan. 1, 2011.

2. Prepare an amortization schedule for the first two years.

3. Prepare a journal entry to record interest on December 31, 2012, using the effective interest method.

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