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Westview Co. Issued $435,000 par value, three-year maturity bonds on January 1, 2011. The annual...

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Accounting

Westview Co. Issued $435,000 par value, three-year maturity bonds on January 1, 2011. The annual interest rate on the bonds is 10 percent, with interest paid yearly on December 31st. The bonds were issued at a market rate of interest on the date of issuance of 12 percent for $414,104. The following is the effective interest amortization schedule for the bonds. Payment Book Value interest Interest Amortization Book Value, Date Beginning payment Expense Ending 12/31/11 414,104 43,500 49,692 6,192 420,297 12/31/12 420,297 43,500 50,436 6,936 427,232 12/31/13 427,232 43,500 51,500 7,768 435,000 Required: Prepare Journal entries for the following 1. The issuance of the bonds on January 1, 2011. 2. The First Annual Interest payment on December 31, 2011.

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