Purpose: (L.O. 5) This exercise will illustrate the journal entry required to record the issuance of bonds at a price other than par.
The Russell Corporation issued 4,000 bonds dated May 1, 2014. These bonds are 10-year term bonds with a face value of $1,000 each and a stated interest rate of 8%. Interest is payable semiannually on November 1 and May 1.