Question

e Joumalize the issuance of the bonds payable on January 1, 2018. 7. Journalize the payment of semiannual interest and amortization of the bond discount or premium (uaing the straight-ine amortization methoß) on July semiannual intereat and amortization of the bond discount or premium 1, 2018 the issuance of the bonds payable and the payment of the irst b ,2018 and Ex Jan. 1 Ju. 1

Answer 1

40 6) 41 Date 42 2018 43 1-Jan Cash (80000"88/100) Account Titles & Explanation Debit Credit 70,400 9,600 Discount on Bonds payable Bonds Payable (to record issue of Bonds) 80,000 45 46 47 48 Date Interest to be Paid @4% on Face Value ( 1) 49 50 51 527 53 1-Jul Interest expense 54 Amortization Carry value (4) Interest Expense on Carrying Value (2) 1-Jan 1-Jul 70,400 70,880 3,200 3,680 480 3,680 480 3,200 Discount on Bonds Payable Cash (To record payment of Interest) 56 57 58 8) 59 Date 60 1-Jan Cash (80000*114/100) 61 62 63 Account Title & Explanation Debit Credit 91,200 Bonds payable Premium on Bonds Payabl 80,000 11,200 (To record sale of Bonds at Premium)

65 Date Cash paid @8%/2-4% Interest ExpenseAmortization Unamortized Carrying Value of premium Premium 67 68 1-Jan 69 70 71 1-Jul Interest expense 72 73 74 75 76 1,200.00 10,640.00 91,200.00 90,640.00 1-Jul 3,200 2,640.00 560.00 2,640 560 Premium on Bonds Payable Cash 3,200 (To record the first Interest payment)