The board of directors of the Columbus Corporation the dated April 1.2019, and m

Question

The board of directors of the Columbus Corporation the dated April 1.2019, and maturing on April 1, 2029. Interestis payable semiannually on April 1 and October 1 Each bond has a face value of $1,000. Because the funds to be raised were not immediately needed, no bonds were authorized the issuance of $475,000 face value of 10-year 12 percent bonds issued until 2021 2821 Apr 1 Issued $80,e00 of bonds at 101.8 Oct. 1 Paid the semiannual bond interest. 1 Issued $40,080 bonds at face value. 1 Recorded the amortization of the premiun on the bonds sold on April 1 using the straight-line method. Des, 31 Recorded the adjusting entry to accrue the bond interest and to amortize the 31 Closed the Bond Interest Expense account into the Income Summary account. Record the above transactions in a general journal. Journal entry worksheet Issued s8o,000 of bonds at 101.8. K Prev 3 of 10E Next 0?

Explanation / Answer

Journal Entries: Date Accounts title and explanations Debit $ Credit $ 1-Apr Cash Account Dr. 81440     Bonds payable Account 80000     Premium on bonds payable Account 1440 1-Oct Interest expense Account Dr. 4800     Cash account (80000*12%*6/12) 4800 1-Oct Cash account Dr. 40000     Bonds payable Account 40000 1-Oct Premium on Bonds payable Dr. 72     Interest expense Account (1440/20) 72 31-Dec Interest Expense 3564 Premium on Bonds payable (1440/20*1/2) 36     Interest payable (120000*12%*3/12) 3600 31-Dec Income Summary Dr. 8292     Interest expense 8292

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