Sylvester Company issues 13%, five-year bonds, on December 31, 2014. with a par

Question

Sylvester Company issues 13%, five-year bonds, on December 31, 2014. with a par value of $210,000 and semiannual interest payments. Use the above bond amortization table and prepare journal entries to record the issuance of bonds on December 31. 2014; the first interest payment on June 30, 2015: and the second interest payment on December 31, 2015. transaction list Record the issuance of the bonds. Record the interest payment and amortization on June 30, 2015. Record the interest payment and amortization on December 31, 2015.

Explanation / Answer

Bond Entries:- (Amts in $s) 1 Issuence of Bond:- Particulars Debit Credit 31/12/2014 Cash A/c 202700 Discount on Issue of Bond A/c 7300 Bonds Payable A/c 210000 2. Interest payment 30/06/2015 Interest expense 13650 To Cash 13650 (210000*13%*1/2) 2b) Amortization 30/06/2015 Interest expense 730 Discount on Issue of Bond A/c 730 (7300-6570) 3. Interest payment 31/12/2015 Interest expense 13650 To Cash 13650 (210000*13%*1/2) 3 b) Amortization 30/06/2015 Interest expense 730 Discount on Issue of Bond A/c 730 (6570-5840)

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