Question & Answer: On June 30, Doherty Limited issues 6%, 20-year bonds payable with a face value of $120,000. The bonds are issued at 90 an…..

On June 30, Doherty Limited issues 6%, 20-year bonds payable with a face value of $120,000. The bonds are issued at 90 and pay interest on June 30 and December 31. Assume bonds payable are amortized using the straight-line amortization method.

1. Journalize the issuance of the bonds on June 30.

2. Journalize the semiannual interest payment and amortization of the bond discount on December 31.