Simko Company issued $680,000, 5-year, 5 percent bonds on January 1, 2015. The b
ID: 2445977 • Letter: S
Question
Simko Company issued $680,000, 5-year, 5 percent bonds on January 1, 2015. The bonds were issued for $620,000. Interest is payable annually on December 31. Using straight-line amortization, prepare journal entries to record (a) the bond issuance on January 1, 2015, and (b) the payment of interest on December 31, 2015. 1.Record the issuance of bonds with a face value of $680,000 for $620,000. 2. Record the issuance of bonds with a face value of $680,000 for $620,000. 2.Record the interest payment on December 31, 2015.
Explanation / Answer
Date
Title of Account
Debit
Credit
2015
Jan. 1
Cash / Bank
620000
Loss / Discount on Issue
60000
5% Bond
680000
Dec. 31
Interest Payable
34000
Cash
34000
Date
Title of Account
Debit
Credit
2015
Jan. 1
Cash / Bank
620000
Loss / Discount on Issue
60000
5% Bond
680000
Dec. 31
Interest Payable
34000
Cash
34000
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