Bond issued between interest dates? Accounting question?

Question

Oriole Company issues $20300000 of 10-year, 12percent bonds on March 1, 2017 at 97 plus accrued interest. The bonds are dated January 1, 2017, and pay interest on June 30 and December 31.

Can anyone show me how to do the journal entries?

Don G · Answer

On March 1:
DR Cash 20,097,000 DR Bond Discount 609,000
CR Bonds Payable 20,300,000 CR Accrued Interest 406,000

On June 30:
DR Accrued Interest 406,000 DR Interest Expense 812,000
CR Cash 1,218,000

On Dec 31:
Dr Interest Expense 1,218,000 CR Cash 1,218,000

Bond issued between interest dates? Accounting question?

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