On July 1, 2016, Flay Foods issued $100 million of its 8%, bonds for $92...
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Accounting
On July 1, 2016, Flay Foods issued $100 million of its 8%, bonds for $92 million. The bonds were priced to yield 10%. The bonds are dated July 1, 2016. Interest is payable semiannually on December 31 and June 30. Flay records interest at the effective rate. Flay records interest at the effective rate. Required: 1. Prepare the journal entry to record interest on December 31, 2016 (the first interest payment). 2. Prepare the journal entry to record interest on June 30, 2017 (the second interest payment).
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