Problem 1: On September 30, Jose’s Jalapenos Inc., issued $1,000,000 of 10-year 9% bonds sated September 30, for $1,067,950 an effective (market) rate of 8%. Interest is payable semi-annually on...

Issuance of bonds:
1) Issuing Corporation books:
a) Issuance of bonds:
     Date
    Account name
    Debit
    Credit
    Sep 30,
    Cash
    $1,067,950
    
    
     Bonds payable
    
    $1,000,000
    
     Premium on bonds payable
    
     $67,950
b) Accrual of interest and amortization for the period ended December 31
    Date
    Account name
    Debit
    Credit
    Dec 31
    Interest expense
    $21359
    
    
     Premium on bonds payable
    $1141
    
    
     Interest payable
    
     $22500
$1000,000 * 2.25/100 = $22,500 (9% / 4 quarters = 2.25% for each quarter)
$1,067,950 * 2/100 = $21359 (8% / 4 quarters = 2% for each quarter)
$22500 - $21359 = $1141

c) Redemption of the bonds on January 1 at 102

    Date
    Account name
    Debit
    Credit
    Jan 1...