In: Accounting
Universal foods issued 12% bonds, dated January 1, with a face amount of $155 million on January 1, 2018 to Wang Communcations. The bonds mature on December 31, 2032 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight line method. Universal Foods sold the entire bond issue to Wang Communications.
Required: 1-3. Prepare the journal entry to record the purchase of the bonds by Wang Communications on January 1, 2018, interest revenue on June 30, 2018 and interest revenue on December 31, 2025.