The Gorman Group issued $900,000 of 13% bonds on June 30, 2021, for $967,707. The bonds were dated on June 30 and mature on June 30, 2041 (20 years). The market yield for bonds of similar risk and is 12%. Interest is paid semiannually on December 31 and June 30.
Required:
1. Prepare the journal entry to record their issuance by The Gorman Group on June 30, 2021.
2. Prepare the journal entry to record interest on December 31, 2021 (at the effective rate).
3. Prepare the journal entry to record interest on June 30, 2022 (at the effective rate).
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