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question on january 1 2014 floppy co issued 4 bonds with a face valueof 400 000 when 4278420

Question

On January 1, 2014, Floppy Co. issued 4% bonds with a face valueof $400,000 when the market interest rate was 6%. The bonds are duein ten years, and interest is payable every Januarey 1 and June 30.Floppy does not elect the fair value option for reporting itsfinancial liabilities. Do not provide any journal explanations. Ifno entry is necessary, write “no entry.” Round all numbers to thenearest dollar.

Required:

a. Prepare the journal entries for the bond issue on January 1,2014.

b. Prepare the journal entry for the interest payment on June30, 2016.

c. Prepare any required end of 2016 adjusting entry.

 

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