Answer
Step1:
2010 Jan. 1
Cash 559,740 dollars
Discount on bonds payable 40,260 dollars
Bonds Payable 600,000 dollars
Step2:
2010 Dec. 31
Bonds Interest Expenses 44.279 dollars
Bonds Interest payable 42,000 dollars
Discount on bonds payable 2,779 dollars
Step3:
2011 Jan. 01
Bonds interest payable 42,000 dollars
Cash 42,000 dollars
Work Step by Step
Step1:
To record issue of bonds at a discount
Step2:
To record accrued bond interest and Amortization of bond discount
Step3:
To record payment of bonds interest
