On January 1, 2019, Prairie Corp issues $800,000 in 10 year bonds that pay 6%, while bonds of similar risk and maturity are paying 7%. They pay interest semi-annually on June 30th and December 31st. They use the effective interest method to calculate interest expense.
Requirement 1, You need 3 total responses for this requirement:
Provide the following for Prairie Corp’s bond issuance: (1)Number of compounding periods; (2) Market rate per compounding period; (3) Cash interest payment to be made to bondholders per period
Requirement 2, You need a journal entry for this
Prepare the journal entry to record issuance of the bonds on January 1, 2019 by Prairie Cop
REQUIRED, You need a journal entry for this
Prepare the journal entry to record the interest payment on June 30, 2019 by Prairie Corp:
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