On January 1, 2016, Knorr Corporation issued $800,000 of 6%,
5-year bonds dated January 1, 2016. The bonds pay interest annually
on December 31. The bonds were issued to yield 7%. Bond issue costs
associated with the bonds totaled $18,848.31.
Required:
Prepare the journal entries to record the
following:
January 1, 2016, Sold the bonds at an effective rate of 7%
December 31, 2016, First interest payment using the effective
interest method
December 31, 2016, Amortization of bond issue costs...