Question

31 the nterest payment and amortiration of bond nterest payment and amorlzation of bond

Answer 1

Bond issue price	$    2,52,000.00
Face value	$    2,40,000.00
Premium on bond	$       12,000.00
Number of Interest payments (10 years x 2 )	20
Premium to be amortized per payment	$             600.00
Interest on bond	$       10,800.00

Requirement 1

Transaction	Description	Debit	Credit
jan 1 2018.	Cash	$       2,52,000
	Premium on bonds payable		$       12,000
	Bonds payable		$   2,40,000
	(Issue of bonds )

Requirement 2 and 3

Transaction	Description	Debit	Credit
30-Jun-18	Bond interest expense	$           10,200
	Premium on bonds payable	$                 600
	Cash		$       10,800
	(Interest on bond paid and Discount amortized)
31-Dec-18	Bond interest expense	$           10,200
	Premium on bonds payable	$                 600
	Cash		$       10,800
	(Interest on bond paid and Discount amortized)

Requirement 4

Transaction	Description	Debit	Credit
31-Dec-2028	Bonds payable	$       2,40,000
	Cash		$   2,40,000
	(Repayment of bond at maturity)