The board of directors of Jeter Production Co. Ltd. authorizes the issuance of 4 percent, 10-year bonds with a maturity value of $12,000,000. The semi-annual interest dates are May 31 and November 30. The bonds are issued through an underwriter on June 30, 2020, at par plus accrued interest from June 1, 2020. Jeter’s year-end is December 31.

Required

1. Journalize the following transactions:

a. Issuance of the bonds on June 30, 2020.

b. Payment of interest on November 30, 2020.

c. Accrual of interest on December 31, 2020.

d. Payment of interest on May 31, 2021.

2. Report interest payable and bonds payable as they would appear on the Jeter Production Co. Ltd. balance sheet at December 31, 2020.

3. Why do we need to accrue interest on June 30 and again on December 31, twice in 2020?