Jung Inc. issued $500,000 of 10-year, 7% bonds payable on April 1, when the market rate was 8%. Jung, Inc. pays interest each September 30 and March 31 and amortizes any discount or premium by the effective interest method. Jung’s year-end is December 31.

Requirements

1. Calculate the cash receipt for the bond issuance.

2. Journalize Jung’s issuance of the bonds.

3. Journalize Jung’s first semiannual interest payment, year-end adjustment, and the second semi-annual interest payment. Explanations are not required.