On 1 January Fairy Wren Ltd. issued $100,000, 10%, 10-year unsecured notes at face value. Interest is payable half-yearly on 1 July and 1 January. Interest is not accrued on 30 June. Fairy Wren Ltd.’s balance date is 31 December.
Prepare journal entries to record the following events.
(For multiple debit/credit entries, list accounts in order of magnitude.Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
1.The issue of the unsecured notes.
2.The payment of interest on 1 July.
3.The accrual of interest on 31 December.