On September 1, 2018, Golf Company issued to Youngblood Company $30,000, five-year, 9 percent (payable semiannually) bonds for $32,320 plus accrued interest. The bonds were dated July 1, 2018, and interest is payable each June 30 and December 31. The accounting period for each company ends on December 31.
Required:
In parallel columns, give entries for the issuer and the investor for the following dates: September 1, 2018; December 31, 2018; and June 30, 2019. Assume that the difference between the interest method and straight-line method amortization amounts is not material; therefore, use straight-line amortization. Youngblood intends to hold the bonds to maturity.