Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

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ID: 2503297 • Letter: #

Question

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3Cli%26nbsp%3Bref%3D%221%22%26nbsp%3Bstyle%3D%22margin%3A%26nbsp%3B0px%3B%26nbsp%3Bpadding%3A%26nbsp%3B0px%26nbsp%3B15px%3B%26nbsp%3Bborder%3A%26nbsp%3B0px%3B%26nbsp%3Bwidth%3A%26nbsp%3B495px%3B%26nbsp%3Bword-wrap%3A%26nbsp%3Bbreak-word%3B%22%3ERecord%26nbsp%3Bthe%26nbsp%3Bissue%26nbsp%3Bof%26nbsp%3Bbonds%26nbsp%3Bwith%26nbsp%3Ba%26nbsp%3Bpar%26nbsp%3Bvalue%26nbsp%3Bof%26nbsp%3B%24100%2C000%26nbsp%3Bcash%26nbsp%3Bon%26nbsp%3BDecember%26nbsp%3B31%2C%26nbsp%3B2013.%3C%2Fli%3E%3C%2Ful%3E%3C%2Ftd%3E%3C%2Ftr%3E%3C%2Ftbody%3E%3C%2Ftable%3E

Explanation / Answer

(200,000 x 5%) / 2 = $5,000 semi-annual cash payment
Semiannual period-end unamortized discount carry value
(0) 12/31/2013 $12,000 $188,000
Dr Cash 188,000
Dr Discount on Bonds Payable 12,000
Cr Bonds Payable 200,000

(1) 6/30/2014 $9,000 $191,000
Dr Bond Interest Expense 8,000
Cr Discount on Bonds Payable 3,000
Cr Cash 5,000

(2) 12/31/2014 $6,000 $194,000
Dr Bond Interest Expense 8,000
Cr Discount on Bonds Payable 3,000
Cr Cash 5,000

(3) 6/30/2015 $3,000 $197,000
Dr Bond Interest Expense 8,000
Cr Discount on Bonds Payable 3,000
Cr Cash 5,000

(4) 12/31/2015 $0 $200,000
Dr Bond Interest Expense 8,000
Dr Bonds Payable 200,000
Cr Discount on Bonds Payable 3,000
Cr Cash 205,000