QUESTION
Garrison, Inc.
The market rate of interest is: 7%
On January 1, 2024, Garrison, Inc., issued 9%, 8-year bonds with a face amount of $2,700,000. Interest is payable annually on December 31.
Assume Garrison, Inc. received $3,000,000 from investors for the bonds issued. Record journal entries required on the following dates:
a. January 1, 2024,
Issued the bonds.
b. December 31,
Paid the first interest payment due.
c. December 31, 2024 Record amortization (using the Straight-line method) on the discount
or premium.
INSTRUCTIONS: Prepare journal entries for the transactions and events above relating to the bonds of Garrison, Inc.