Question: Houston Company authorized a $1,000,000, 10-year, 9% bond issue dated July 1, 2017, with semi-annual interest to be paid each December 31 and June 30.

Houston Company authorized a $1,000,000, 10-year, 9% bond issue dated July 1, 2017, with semi-annual interest to be paid each December 31 and June 30. On July 1, 2017, the market rate of interest bonds 7.5% and Houston Company has a December 31 year-end.

- What is the journal entry to record the sale of the bonds?

- What is the required journal entry on December 31, 2017 to record amortization (use the effective interest method.) No adjusting journal entries were made during the year.

- What is amount of Houstons bond liability as of December 31, 2020?

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