On March 1, 2015, JR (Jim Rice) Corporation issues 10-year bonds,

Sep 17th, 2015
Price: $10 USD

Question description

On March 1, 2015, JR (Jim Rice) Corporation issues 10-year bonds, dated January 1, 2015, with a par value of $1,200,000. These bonds have an annual interest rate of 6 percent, payable semiannually on January 1 and July 1. (Please attempt all parts and show your work for full quality credit)

a. Prepare the journal entry to record the bond issuance at par plus accrued interest.

b. On July 1, 2015, four months after the date of purchase, JR pays the purchaser six months’ interest. JR makes the following entry on July 1, 2015

c. Briefly explain the treatment of the issuance of bonds between interest dates.

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