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Prepare the journal entries to record their issuance

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Question - The Gorman Group issued $900,000 of 11% bonds on June 30, 2021, for $977,220. The bonds were dated on June 30 and mature on June 30, 2041 (20 years). The market yield for bonds of similar risk and maturity is 10%. Interest is paid semiannually on December 31 and June 30.

Prepare the journal entries to record their issuance by the Gorman Group on June 30, 2021, interest on December 31, 2021, and interest on June 30, 2022 (effective rate).

Reference no: EM132819751

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