Refer to the information in RE13 1 Prepare the journal entry
Refer to the information in RE13-1. Prepare the journal entry' on June 30 for Gatrong to record the first interest receipt, using the effective interest method. Round to the nearest dollar.
In RE13-1
On January' 1, 2016, Gatrong Corporation purchased 12%, 5-year Fleming Corporation bonds with a face value of $200,000. It expects to hold these bonds until maturity. The bonds pay interest semiannually on June 30 and December 31. Gatrong paid $215,443, a price that yields a 10% effective annual interest rate.
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