Deer Corp. issued 15-year bonds payable with a face amount of $80,000, when the market interest rate was 5.5%. Assume that the accounting year of Deer ends on December 31.
Journalize the following transactions for Deer. Include an explanation for each entry.
a. Issuance of the bonds payable at par on July 1, 2010.
b. Accrual of interest expense on December 31, 2010 (rounded to the nearest dollar).
c. Payment of cash interest on January 1, 2011.
d. Payment of the bonds payable at maturity. (Give the date.)