Mcwherter Instruments Sold 400 Million Of 8 Bonds On January 1 2018 The Bonds Ma

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McWherter Instruments sold $400 million of 8% bonds on January 1, 2018. The bonds mature on December 31, 2037 (20 years). For bonds of similar risk and maturity, the market yield was 10%. Interest is paid semiannually on June 30 and December 31. 

1)    Prepare the journal entry by McWherter to record interest on December 31, 2018 utilizing the effective interest method.

Account Description                                       Debit                          Credit

 2)    Show how the Bonds would be presented on McWherter’s Balance Sheet as of December 31, 2018.

 
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