Section C Bonds Payable ASU Company issues 3000000 of 10year

Section C- -Bonds Payable ASU Company issues $3,000,000 of 10-year, 6% bonds on April 1, 2018 at 103 plus accrued interest. The bonds are dated January 1, 2018, and pay interest on July 1 and January 1. Prepare the journal entry on April 1, 2018 to record the issuance of these bonds and the accrued interest.

Solution

Cash 3135000      Bonds payable 3000000      Premium on Bonds payable 90000      Interest payable 45000 =3000000*6%/12*3