How do I process these journal transactions On January 1, 2016, Knorr Corporation issued $1,400,000 of 7 , 5 year bonds dated January 1, 2016 The bonds pay interest annually on December 31 The bonds were issued to yield 8 Bond issue costs associated with the bonds totaled $21,540 76 Required Prepare the journal entries to record the following January 1, 2016 Sold the bonds at an effective rate of 8 December 31, 2016 First interest payment using the effective interest method December 31, 2016 Amortization of bond issue costs using the straight line method December 31, 2017 Second interest payment using the effective interest method December 31, 2017 Amortization of bond issue costs using the straight line method

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Question: How do I process these journal transactions? On January 1, 2016, Knorr Corporation issued $1,400,000 of 7%, 5-year bonds dated January 1, 2016. The bonds

How do I process these journal transactions?

On January 1, 2016, Knorr Corporation issued $1,400,000 of 7%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 8%. Bond issue costs associated with the bonds totaled $21,540.76.

Required:

Prepare the journal entries to record the following:

January 1, 2016	Sold the bonds at an effective rate of 8%
December 31, 2016	First interest payment using the effective interest method
December 31, 2016	Amortization of bond issue costs using the straight-line method
December 31, 2017	Second interest payment using the effective interest method
December 31, 2017	Amortization of bond issue costs using the straight-line method

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