Preparing Journal Entries to Record Issuance of Bonds at face Value, Payment of Interest, and Early Retirement. On January 1, 2010, Innovative Solutions, Inc., issued $200,000in bonds at face value. The bonds have a stated interest rate of percent. The mature in 10 years and pay interest once per year on December 31.

Required:

1. Prepare the journal entry to record the bond issuance.

2. Prepare the journal entry to record the interest payment on December 31, 2010 Assume no interest has been accrued Earlier in the year.

3. Assume the bonds were retired immediately after the first interest payment at a quoted price of 102 Prepare the journal entry to record the early retirement of the bonds.

Answer rating: 100% (QA)

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