5-year bonds on January 1,2014. The bonds were dated January 1, 2014, and pay in

Question

5-year bonds on January 1,2014. The bonds were dated January 1, 2014, and pay interest on January 1 Yung Corporation uses the straight-line method to Yung Corporation sold $2,000,000 79 amortize bond premium or discount. Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2014, assuming that the bonds sold at 102. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) s d 12 Date Account Titles and Explanation Debit Credit Jan. 1 Dec. 31 Prepare journal entries to record the issuance of the bonds and bond interest expense for 2014, assuming that the bonds sold at 97. (Credit account titles are automatically indented when an entered. Do not indent manually) Date Account Titles and Explanation Debit Credit Jan. 1 Dec. 31

Explanation / Answer

1)

b)

3)a

d)

Date Account title Debit credit jan 1 Cash      [2,000,000*102/100] 2,040,000 Bond payable 2,000,000 premium on bond payable 40,000 [issuance of bond ] dec 3 Interest expense 132000 Premium on bond premium    [40000/5] 8000 Interest payable     [2,000,000* .07] 140,000 [interest paid ]

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