(Chapter Supplement) Recording and Reporting a Bond Issued at a Discount (without Discount Account) (P10-8)

Zues Corporation is planning to issue bonds with a face value of $800,000 and a coupon rale of percent The bonds mature in two years and pay interest semi annually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Zues uses the effective interest amortization method and docs not use a discount account. Assume an annual market rate of interest of 6 percent

Required

1. Provide the journal entry to record the issuance of the bonds.

2. Provide the journal entry to record the interest payment on June 30 and December 31 of this year.

3. What bonds payable amount will Zues report on this year's December 31 balance sheet.