Essay
On January 1,2018,Effron Inc.sells $2 million of 8% bonds at face value with interest to be paid at the end of each year.Effron accrues interest at the end of each quarter during the year.
Required:
Part a.Prepare the journal entry to record the bond issuance.
Part b.Prepare the required adjusting journal entry as of March 31,2018.
Part c.Assume the required adjusting journal entries were recorded on June 30 and September 30,2018.Prepare the journal entry to record the payment of interest to bondholders on December 31,2018.
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Part a
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