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On January 1, 20x1, Simon Inc. issued 12% bonds, dated January 1, 20x1, with a...

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Accounting

On January 1, 20x1, Simon Inc. issued 12% bonds, dated January 1, 20x1, with a face amount of $11 million. The bonds mature in 10 years. For bonds of similar risk and maturity, the market yield is 10.25%. Interest is paid semiannually on June 30 and December 31. Simon is a calendar-year corporation. Required: 1. Determine the price of the bonds at January 1, 20x1. 2. Prepare the journal entry to record the bond issuance by Simon on January 1, 20x1. 3. Prepare the journal entry to record interest on June 30, 20x1, using the effective interest method.

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