On January 1, 2015, Bochini Corporation sold a $ 10 million, 8.25 percent bond issue. The bonds

Question:

On January 1, 2015, Bochini sold a $ 10 million, 8.25 percent bond issue. The bonds were dated January 1, 2015, had a yield of 8 percent, pay interest each December 31, and mature 10 years from the date of issue.
Required:
1. Prepare the journal entry to record the issuance of the bonds.
2. Prepare the journal entry to record the interest payment on December 31, 2015. Use effective-interest amortization.
3. Show how the bond interest expense and the bonds payable should be reported on the annual for 2015. Financial Statements
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