E10-9 (Algo) (Chapter Supplement) Recording and Reporting a Bond Issued at a Discount (without Discount Account) LO10-4

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Denzel Corporation is planning to issue bonds with a face value of $620,000 and a coupon rate of 7.5 percent. The bonds mature in 8 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Denzel uses the effective-interest amortization method and does not use a discount account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1)

NOte: Use appropriate factor(s) from the tables provided.

E10-9 Part 1

Required:

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

2. Prepare the journal entry to record the interest payment on June 30 of this year.

3. What bond payable amount will Denzel report on its June 30 balance sheet?

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations and final answers to whole dollars.