Prepare the april1 entry to record the interest payment

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Question

Corporation has an opportunity to acquire a company that produces one of the parts it uses in its manufacturing process. Central has decided to raise the necessary capital for the acquisition by issuing $3,000,000 of 7.5%, 10 year bonds dated April1, 2017, with interest payments on October 1 and April 1. Assume the bonds are issued on June 1, 2017 at face value plus accrued interest. Central's year end is December 31.

1) Prepare the entry to record the issuance of the bonds on June 1, 2017.

2) Prepare entry on October 1, 2017, to record the interest payment.

3) Prepare entry to record accrued interest on December 31, 2017.

4) Prepare the April1,2018 entry to record the interest payment.

Reference no: EM132322309

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