Question

at 97. The Windsor Company issued $360,000 of 11% bonds on January 1, 2017, The bonds are due January 1, 2022, with interest payable each July 1 and January 1, The bonds were issued Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Windsor Company records straight-line amortization semiannually. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548 No. Date Account Titles and Explanation Debit Credit (a) January 1, 2017 ash 349200 Discount on Bonds Payable 10800 Bonds Payable 360000 (b)-July 1, 2017 [nterest Expense 20988 , Discount on Bonds Payable 1188 Cash 19800 (c)Dec. 31, 2017Interest Expense Interest Payable 19800 Discount on Bonds Payable

Answer 1

Transaction	Description	Debit	Credit
jan 1 2017	Cash	$     3,49,200
	Discount on Bonds payable	$         10,800
	Bonds payable		$      3,60,000
	(Issue of bonds )
01-Jul-17	Bond interest expense	$         20,880
	Discount on Bonds payable		$      1,080.00
	Cash		$         19,800
	(Interest on bond paid and Discount amortized)
dec 31 2017	Bond interest expense	$         20,880
	Interest payable		$   19,800.00
	Discount on Bonds payable		$      1,080.00
	(Interest on bond paid and Discount amortized)

Working

Bond issue price (2000000/100 x 97)	$        3,49,200.00
Face value	$        3,60,000.00
Discount on Bonds payable	$            10,800.00
Number of Interest payments (5 years x 2)	10
Discount to be amortized per payment	$              1,080.00
Interest on bond	$            19,800.00
Interest expense to be recorded (19800+1080)	$            20,880.00