Essay
Rock Company issued a $1,000,000 bond on January 1,2019.The bond was dated January 1,2019,had an 8% coupon rate,pays interest annually on December 31,and sold for $924,184 at a time when the market rate of interest was 10%.Rock uses the effective-interest method to account for its bonds.
Prepare the necessary journal entry for each of the following dates (assuming that no adjusting journal entries have been made during the year):
(a)January 1,2019
(b)December 31,2019
(c)December 31,2020
Round the entry items to the nearest whole dollar amounts.
Correct Answer:
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(a)January 1,2019
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