Tuesday (April 24, 2018) in Class. Please return next MUST BE HANDWRITTEN The fo

Question

Tuesday (April 24, 2018) in Class. Please return next MUST BE HANDWRITTEN The following is the amortization table for the first two six-month periods of a $200,000 face value bond that sold for $160.000. The Bonds were sold on April 1, 2018 Period Amount owed (beg) Interest Expense Interest Payment Amount owed (end) $160,000 $160,800 $12,800 $12,864 $12,000 $12,000 $160,800 $161,664 2 Using the amortization table above and the T-accounts on this page, show the necessary accounting entries for (a) the original sale of the bonds on April 1; (b) the first payment date on October 1; (c) the necessary adjusting entries on December 31; (4) the second payme on April 1 of the second year Cash Bonds Payable Discount on Bonds Payable Interest Payable Interest Expense Bonus! +2 points if you can complete the amortization table (please use separate page

Explanation / Answer

Date Account Debit credit April 1 2018 Cash 160000 Discount on bond payable 40000 Bond payable 200000 [bond issued at discount] 1 oct 2018 Interest expense 12800 Discount on bond payable 800 cash 12000 [first semiannual payment made] 31 dec 2018 Interest expense [12864*3/6] 6432 Discount on bond payable 432 Interest payable [12000*3/6] 6000 [interest accrued for 3 months (1oct -31dec) out of 6 months]

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