A company issued 10-year. 9% bonds, with a par value of $500,000 when the marvel

Question

A company issued 10-year. 9% bonds, with a par value of $500,000 when the marvel rate was 9.5%. The issuer received $484,087 in cash proceeds Prepare the issuer's journal entry to record the bond issuance. Using the straight-line method, prepare the issuer's journal entry to record the first semiannual interest payment and the amortization of any bond discount or premium (Round amounts to the nearest whole dollar) Strider Corporation issued 14%, 5-year bonds with a par value of $5,000,000 on June 1, Year 1. Interest is to be paid semiannualy on each December 1 and June 1, The bonds are issued at $5,368,035 cash when the market rate for this bond is 12%. Prepare the general journal entry to record the issuance of the bonds on June 1, year 1. Assume instead that Strider uses the straight-line method of amortization of any discount or premium on bonds. Prepare the general journal entry to record the first semiannual interest payment on December 1, Year 1. Record the adjusting entry to accrue interest payable and bond amortization at yearend. A company previously issued $2,000,000.10% bonds, receiving a $120,000 premium On the current year's interest date, after the bond interest was paid, $72,000 remained in the Bond Premium account. The company purchased the entire bond issue on the open market at 98 and retired it. Prepare the journal entry to record the retirement of these bonds.

Explanation / Answer

Answer:1(a)

Cash A/C Dr. $484087

Discount on issue of bonds Payable A/C Dr. $15913

To Bonds Payable A/C $500000

Answer:1(b)

Bond interest expense A/C Dr. $23295.65

To Discount on Bonds Payable A/C $795.65

To cash A/C $22500

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