Question

Required information Exercise 9-9B Record bonds issued at a premium and related semiannual interest (LO9-5) [The following information applies to the questions displayed below.] On January 1, Year 1, a company issues $320,000 of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 7%, the bonds will issue at $349,428. Exercise 9-9B Part 2 2. Record the bond issue on January 1, Year 1, and the first two semiannual interest payments on June 30, Year 1, and December 31, Year 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your final answers to the nearest whole dollar.)

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer 2. 3 Credit 4 Date 5 January 1, Year 1 6 Debit 349428 Journal Entry Particular Cash Premium on Bond Payable Bond Payable (To record bond issued at Premium) 29428 320000 10 June 30, Year 1 12230 570 Interest expense (349428*7%/2) Premium on bond payable (12800-12230) Cash (320000*8%/2) (To record interest expense) 12800 December 31, Year 1 12210 590 Interest expense ((349428-570)*7%/2) Premium on bond payable (12800-12210) Cash (320000*8%/2) (To record interest expense) 12800