On March 1, 2021, Brown-Ferring Corporation issued $100.4 million of 15% bonds, dated January 1,...
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Accounting
On March 1, 2021, Brown-Ferring Corporation issued $100.4 million of 15% bonds, dated January 1, 2021, for $98 million (plus accrued interest). The bonds mature on December 31, 2040, and pay interest semiannually on June 30 and December 31. Brown-Ferrings fiscal period is the calendar year.
Required:
1. Determine the amount of accrued interest that was included in the proceeds received from the bond sale.
2. Prepare the journal entry for the issuance of the bonds by Brown-Ferring.
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