Question

On March 1, 2016, Reeves Company issued five-year, 10%, $800,000 face value bonds at par plus accrued interest. The bonds were dated January 1, 2016, and pay interest semiannually each July 1 and January 1.^.

Required:

1-Prepare the journal entry for the bond issuance on March 1, 2016.

2-Prepare the journal entries to record the interest paid/accrued on July 31, 2016 and December 31, 2016.

3-How much interest expense, in total, will Reeves Company recognize in the year 2016?

Please show calculations; thanks.