On the first day of the fiscal year, a company issues a $930,000, 7%, five-year
ID: 2436681 • Letter: O
Question
On the first day of the fiscal year, a company issues a $930,000, 7%, five-year bond that pays semiannual interest of $32,550 ($930,000 × 7% × 1/2), receiving cash of $884,175. Required: Journalize the entry to record the issuance of the bonds.
A $306,000 bond was redeemed at 104 when the carrying value of the bond was $350,000. The entry to record the redemption would include a
On January 1 of the current year, Barton Corporation issued 12% bonds with a face value of $99,000. The bonds are sold for $94,050. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, five years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 is
Explanation / Answer
Journal entry :
SO bond interest expense = 6435
No Account and explanation debit credit a Cash 884175 Discount on bonds payable 45825 Bonds payable 930000 (To record bond issue) b Bonds payable 306000 Premium on bonds payable 44000 Gain on redemption on bonds 31760 Cash (306000*1.04) 318240 (To record redemption on bonds) c Interest expense 6435 Discount on bonds payable (99000-94050/10) 495 Cash (99000*12%*6/12) 5940 (To record bond interest expense))Related Questions
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