On January 1,20X3,Nets N' Hoops Issued $5,000,000 of 9%,10-Year Bonds

Essay

On January 1,20X3,Nets n' Hoops issued $5,000,000 of 9%,10-year bonds dated January 1,20X3,with annual interest payments on December 31.The bonds were issued for $4,692,570 yielding an effective interest rate of 10%.Nets n' Hoops uses the effective-interest method of amortization.
a.Prepare the necessary journal entries to record the issuance of the bonds and the first interest
payment.
b.Determine the ending net liability of the bonds on December 31,20X3.