The Colson Company issued $362,000 of 9% bonds on January 1, 2014. The bonds are
ID: 2408976 • Letter: T
Question
The Colson Company issued $362,000 of 9% bonds on January 1, 2014. The bonds are due January 1, 2020, with interest payable each July 1 and January 1. The bonds were issued at 102.
Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Colson 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.)
No.
Date
Account Titles and Explanation
Debit
Credit
January 1, 2014
July 1, 2014
December 31, 2014
No.
Date
Account Titles and Explanation
Debit
Credit
(a)January 1, 2014
(b)July 1, 2014
(c)December 31, 2014
Explanation / Answer
Journal entry :
Date accounts & explanation debit credit Jan 1,2014 Cash (362000*1.02) 369240 Bonds payable 362000 Premium on bonds payable 7240 (To record bond issue) July 1,2014 Interest expense 15687 Premium on bonds payable (7240/12) 603 Cash (362000*9%*6/12) 16290 (To record interest) Dec 31,2014 Interest expense 15687 Premium on bonds payable 603 Interest payable 16290 (To record interest)Related Questions
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