Question

Required information [The following information applies to the questions displayed below.) On January 1, 2021, Splash City issues $400,000 of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 9% and the bonds issued at $367,422. 2. If the market interest rate drops to 6% on December 31, 2022, it will cost $471,507 to retire the bonds. Record the retirement of the bonds on December 31, 2022. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your intermediate calculations to the nearest whole dollar amount.) View transaction list Journal entry worksheet Record the retirement of the bonds. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2022 Record entry Clear entry View general journal

Answer 1

Answer
Date	Explanation	Debit	Credit
01-Jan-21	Cash	$    367,422
	Discount on Bonds Payable	$      32,578
	Bonds payable		$      400,000
	( To record Discount on Bonds )
30-Jun	Interest Expenses (367422  x 9%/2)	$      16,534
	Discount on Bonds Payable		$             534
	Cash ($400,000 x 8%/2)		$        16,000
	( To record interest exp)
31-Dec	Interest Expenses($367422+534) x 9%/2	$      16,558
	Discount on Bonds Payable		$        783
	Cash ($400,000 x 8%/2)		$        16,000
	( To record interest exp)