Woodwick Company issues 8%, five-year bonds, on December 31, 2015, with a par va

Question

Woodwick Company issues 8%, five-year bonds, on December 31, 2015, with a par value of $108,000 and semiannual interest payments Semiannual Period-End Unamortized Premium Carrying Value (0) 12/31/2015 (1) 6/30/2016 (2) 12/31/2016 $ 8,271 7.444 6,617 $116,271 115,444 114,617 Use the above straight-line bond amortization table and prepare journal entries for the following (a) The issuance of bonds on December 31, 2015 (b) The first interest payment on June 30, 2016 (c) The second interest payment on December 31, 2016 View transaction list Journal entry worksheet Record the issue of bonds with a par value of $108,000 cash on December 31, 2015. Note: Enter debits before credits General Journal Debit Credit Dec 31,2015 Record entry Clear entry View general journal De

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit 12/31/15 Cash 116271 Bonds payable 108000 Premium on bonds payable 8271 (To record issue bonds payable) 6/30/16 Interest expense 3493 Premium on bonds payable 827 Cash (108000*8%*6/12) 4320 (To record interest paid) 12/31/16 Interest expense 3493 Premium on bonds payable 827 Cash 4320 (To record interest payment)

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