Question: On January 1, Prescott, Corp., issues 5%, 15-year bonds payable with a maturity value of $130,000. The bonds sell at 94 and pay interest on

On January 1, Prescott, Corp., issues 5%, 15-year bonds payable with a maturity value of $130,000. The bonds sell at 94 and pay interest on January 1 and July 1. Prescott, Corp., amortizes any bond discount or premium by the straight-line method.

Requirements

1. Record the issuance of the bonds on January 1.

2. Record the semiannual interest payment and amortization of any bond discount

or premium on July 1 .

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