Simon Company sold $100,000 of 8%, 10-year bonds on January 1, 2020, at $114,878. Interest...
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Accounting
Simon Company sold $100,000 of 8%, 10-year bonds on January 1, 2020, at $114,878. Interest is payable semiannually on July 1 and January 1. Simon Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 6%.
a. Prepare journal entry to record the issuance of the bonds.
b. Prepare journal entry to record t he payment of interest and related amortization on July 1, 2020.
c. Compute the accrual of interest (interest expense from 7/1/2020-12/31/2020) on December 31, 2020.
(Round to the nearest dollar.)
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