Johnson Company sold for $90,000 a $102,400, two-year zero coupon bond on December 31, 2011. The bond

Question:

Johnson Company sold for $90,000 a $102,400, two-year zero bond on December 31, 2011. The bond matures on December 31, 2013.

Required:
1. Prepare the entry to record the issuance of the bond.
2. Prepare the adjustment to recognize 2012 interest expense.
3. Prepare the entry to recognize the 2013 interest expense and the repayment of the bond on December 31, 2013. Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...