Answer and Explanation:
1. The amount of the accrued interest rate is
= Principal × rate of interest × time period
= $100,000,000 × 12% × 2 months ÷ 12 months
= $2,000,000
The 2 months are considered from December 31 to March 31
2. And, the journal entry is
Cash Dr $101,000,000 ($99,000,000 + $2,000,000)
Discount on bond payable $1,000,000
To Bond payable $100,000,000
To Interest payable $2,000,000
(being the issuance of the bond is recorded)
Here it debited the cash as it increased the assets and credited the bond payable and interest payable as it also increased the liabilities
