Simko Company issued $600,000, 10-year, 5 percent bonds on January 1, 2012. The bonds were issued for

Question:

Simko Company issued $600,000, 10-year, 5 percent bonds on January 1, 2012. The bonds were issued for $580,000. Interest is payable annually on December 31. Using straight-line amortization, prepare journal entries to record (a) the bond issuance on January 1, 2012, and (b) the payment of interest on December 31, 2012.