Question

Several years ago the company issued a $300,000, 5% bond. The Bond pays interest semi-annually each January 1 and July 1st. The bonds were sold at a discount. An amortization schedule follows: What is the adjusting entry as of the year ended May 31, 2020
Date Cash   Interest   Amortization   Carrying Value
7/1/2019   7,500   8,100 600 270,600
1/1/2020   7,500   8,118 618 271,217
7/1/2021   7,500   8,136   637 271,854

Answer 1

Solution:

Date	Particulars	Debit	Credit
31-May	Interest Expense Dr (8136*5/6)	$6,780
2020	To Discount on Bond payable		$530
	To Cash ($7500*5/6)		$6,250