On October 1, 2016, Ball Company issued 6% bonds dated October1, 2016, with a face amount of $210,000. The bonds mature in 9years. Interest is paid semiannually on March 31 and September 30.The proceeds from the bond issuance were $218,888.62 to yield5.40%. Ball Company has a December 31 fiscal year-end and does notuse reversing entries.
Required:
| 1. | Prepare journal entries torecord the issuance of the bonds and the interest payments for 2016and 2017 using the effective interest method. |
| 2. | Prepare journal entries torecord the issuance of the bonds and the interest payments for 2016and 2017 using the straight-line method. |
