Bonds with Annual Interest Payments
Kiwi Corporation issued at par $350,000, 8% bonds on December 31, 2013. Interest is paid annually on December 31. The principal and the final interest payment are due on December 31, 2015.
1) Prepare the entry to recognize the issuance of the bonds. (Record issuance of bonds at par)
2)Prepare the journal entry for December 31, 2014. (Record interest expense)
3)Prepare the journal entry to record repayment of the principal on December 31, 2015. (Record repayment of bond principal)