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On July 1, 2010, Brower Industries Inc. issued $32,000,000 of 10-year, 12% bonds at an effective interest rate of 13%, receiving cash of $30,237, 139....

On July 1, 2010, Brower Industries Inc. issued $32,000,000 of 10-year, 12% bonds at an
effective interest rate of 13%, receiving cash of $30,237, 139. Interest on the bonds is
payable semiannually on December 31 and June 30. The fiscal year of the company is
the calendar year.
Instructions
1. Journalize the entry to record the amount of cash proceeds from the sale of the
bonds.
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, 2010, and the amortization
of the bond discount, using the straight-line method. (Round to the nearest
dollar.)
b. The interest payment on June 30, 2011, and the amortization of the bond discount,
using the straight-line method. (Round to the nearest dollar.)

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