(Answered) Question - on january 1 2010 a company issued 10-year 10

Accounting

Question - On January 1, 2010, a company issued 10-year, 10% bonds payable with a par value of $500,000 and received $442,647 in cash proceeds. The market rate of interest at the date of issuance was 12%. The bonds pay interest semiannually on June 30 and December 31. The issuer uses the straight-line method for amortization.

a) Prepare the journal entry to issue the bond on January 1, 2010.

b) Prepare the journal entries to record the first two semiannual interest payments on June 30, 2010 and December 31, 2010.

c) Calculate the total bond interest expense for the year ended December 31, 2010.

d) Calculate the bond carrying value as of December 31, 2010.

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