Prosser Corporation produces and sells baseball cards. On July 1, 2010, Prosser Corporation issued $40,000,000 of 10-year,

Question:

Prosser produces and sells baseball cards. On July 1, 2010, Prosser issued $40,000,000 of 10-year, 12% bonds at an effective interest rate of 11%, receiving cash of $42,390,112. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Instructions
1. Journalize the entry to record the amount of cash proceeds from the sale of the bonds.
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, 2010, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.)
b. The interest payment on June 30, 2011, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.)
3. Determine the total interest expense for 2010.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...