On January 1, 2011, Fabian Enterprises issued 9%, 10-year bonds with a face amount of $900,000 at 96

Accounting Mar 10, 2021

On January 1, 2011, Fabian Enterprises issued 9%, 10-year bonds with a face amount of $900,000 at 96. Interest is payable semiannually on June 30 and December 31. The bonds were issued for an effective interest rate of 10%.

Instructions

Prepare the entries to record the issuance of the bonds and the first semiannual interest payment assuming that the company uses effective-interest amortization.

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