Exercise 10-12 Assume that the following are independent situations recently rep

Question

Exercise 10-12 Assume that the following are independent situations recently reported in the Wall Street Journal. 1. General Electric (GE) 7% bonds, maturing January 28, 2015, were issued at 114.43. 2. Boeing 7% bonds, maturing September 24,2029, were issued at 98.59. (c) Prepare the journal entry to record the issue of each of these two bonds, assuming each company issued $700,000 of bonds in total. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit

Explanation / Answer

JOURNAL ENTRIES:

DATE PARTICULARS DEBIT($) CREDIT($) GE CASH A/C DR 8,01,010 TO PREMIUM ON BONDS A/C 1,01,010 TO 7%BONDS A/C 7,00,000 (BEING 7,000 BONDS ISSUED FOR $114.43 EACH) BOEING CASH A/C DR 6,90,130 DISCOUNT ON ISSUE OF 7% BONDS A/C DR 9,870 TO 7% BONDS A/C 7,00,000 (BEING 7,000 BONDS ISSUED FOR $98.59 EACH)

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