Question

Login Pa CALCULATON FULL SCREEN PRINTER Brief Exercise 10-12 Cullumber Company has issued three different bonds during 2019. Interest is payable annually on each of these bonds. 1. On January 1, 2019, 1,000, 6%, 5-year, $1,000 bonds dated January 1, 2019, were issued at face value. 2. On July 1, $700,000, 7%, 5-year bonds dated July 1, 2019, were issued at 101. 3. On September 1, $200,000, 5%, 5-year bonds dated September 1, 2019, were issued at 97. Prepare the journal entries to record each bond transaction at the date of issuance. (Credit account titles are automatically indented wh Do not indent manually.) No. Date Account Titles and Explanation Debit Credit 3. Sept. 1 SHOW LIST OF ACCOUNTS

Answer 1

1) Cash account.......Debit $1,000,000 [1000 * $1,000]

To Bonds payable account. credit $1,000,000

2) Cash account................Debit $707,000 [$700,000 * 1.01]

Premium on bonds payable credit $7,000

Bonds payable account.... credit $700,000

3) Cash account...................Debit $194,000 [$200,000*0.97]

Discount on bonds payable Debit $6,000

To bonds payable account....credit $200,000