Question

[The following information applies to the questions displayed below.] On January 1, 2021, Twister Enterprises, a manufacturer of a variety of transportable spin rides, issues $550,000 of 7% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. 3. If the market interest rate is 6%, the bonds will issue at $603,901. Record the bond issue on January 1, 2021, and the first two semiannual interest payments on June 30, 2021, and December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest dollar amount.)

Record first semi annual interest payment:

Record second semi annual interest payment:

Answer 1

Journal entry

Date	account and explanation	Debit	Credit
Jan 1	Cash	603901
	Bonds payable		550000
	Premium on bonds payable		53901
June 30	Interest expense (603901*6%*6/12)	18117
	Premium on bonds payable	1133
	Cash (550000*7%*6/12)		19250
Dec 31	Interest expense	18083
	Premium on bonds payable	1167
	Cash		19250