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Diamond Solutions issued $1,000,000 of 10%, 10-year bonds on January 1, 2020, at 109. Interest...

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Accounting

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Diamond Solutions issued $1,000,000 of 10%, 10-year bonds on January 1, 2020, at 109. Interest on the bonds is payable semi-annually on January 1 and July 1. Assume an effective yield of 9% Note: With a market rate of 9%, the price should be slightly lower. Ignore this for simplicity. Diamond Solutions uses the effective interest method of amortization for any bond premium or discount Instructions: Prepare the journal entries to record the following: a. The issuance of the bonds b. The payment of interest and the related amortization on July 1, 2020 c. The accrual of interest and the related amortization on December 31, 2020 Round amounts to the nearest dollar. Show ALL calculations for full marks

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