On january 1, 2019, Potter incorporate sold a 5-year, $500,000 bond with a stated rate...
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On january 1, 2019, Potter incorporate sold a 5-year, $500,000 bond with a stated rate of 5% for $450,675. The market interest rate at the time was 6%. Interest is paid semi-annually on June 30 and December 31. Potter incorporated, a public company, uses the effective-interest method of amortization for bonds. Round the whole numbers, no decimal places.
Prepare the journal entry to properly record the issue of bonds on January1, 2019.
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