on Decembe?31 Sun and us Sunland Compa ny issued $460 500 7 15-year bonds on Dec

Question

on Decembe?31 Sun and us Sunland Compa ny issued $460 500 7 15-year bonds on December 3 1 2016 for $442 080 Interest is payable annual line method to amortize bond premium or discount. strai Prepare the journal entries to record the following events. (Credit account titles are automatically Indented when amount is entered. Do not Indent manually.) (a) (b) (c) The issuance of the bonds. The payment of interest and the discount amortization on December 31, 2017. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. Date Account Titles and Explanation Debit Credit (a) Dec. 31, 2016 (b) Dec. 31, 2017 (c) Dec. 31, 2031

Explanation / Answer

No. Date Account Titles and Explanation Debit Credit (a) Dec. 31, 2016 Cash $442,080 Discount on bonds $18,420 Bonds payable $460,500 (b) Dec. 31, 2017 Interest on bonds $33,463 Discount on bonds ($18,420 / 15) $1,228 Cash ($460,500 x 7%)   $32,235 (c) Dec. 31, 2031 Bonds payable $460,500 Cash $460,500

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