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  3. coffman company sold bonds with a face value of $1

Coffman Company sold bonds with a face value of $1,000,000 for $961,391. The bonds have...

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Accounting

Coffman Company sold bonds with a face value of $1,000,000 for $961,391. The bonds have a coupon rate of 9 percent, mature in 5 years, and pay interest semiannually every June 30 and December 31.

All of the bonds were sold on January 1 of this year. Using a discount account, record the sale of the bonds on January 1 and the payment of interest on June 30 of this year. Coffman uses the effective-interest amortization method. Assume an annual market rate of interest of 10 percent. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round final answers to nearest whole dollar.)

(General Journal options:

  • No journal entry required
  • Bonds payable
  • Cash
  • Discount on bonds payable
  • Interest expense
  • Interest revenue
  • Loss on bond call
  • Premium on bonds payable
  • Rent revenue)

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