cation.com/hm.tpx The board of directors of Belmont, LLC, authorized the issuanc

Question

cation.com/hm.tpx The board of directors of Belmont, LLC, authorized the issuance of $600,000 face value, 20-year, 5 percent bonds, dated March 1, 2016, and maturing on March 1, 2036. Interest is payable semiannually on September 1 and March 1. DATE TRANSACTIONS FOR 2016 Jun. 1 Issued bonds with a face value of $480,000 at 97.63 plus accrued interest from March 1. (When bonds are issued between interest payment dates, the accrued interest is paid to the corporation by the purchaser. Credit Bond Interest Expenso.) Sept. 1 Paid the semiannual bond interest and amortized the discount for three months. (Make two entries. Use the straight-line method to compute the amortization.) Dec. 31 Recorded an adjusting entry to accrue the interest and to amortize the discount. (Make one entry.) 31 Closed the Bond Interest Expense account to the Income Summary account DATE TRANSACTIONS FOR 2017 Jan. 1 Reversed the adjusting entry made on December 31, 2016. Mar. 1 Paid the semiannual bond interest and amortized the discount on the outstanding bonds. 1. Record the following transactions in general journal form. Answer is not complete. No Date General Journal Debit Credit Jun 01, 2016 Cash 323.792 Discount on bonds payable 21 11.376 2 Sep 01, 2016 Bond interest expense 11,716 Cash 11,716

Explanation / Answer

Sl.no 1 related entry can be clubbed and posted as one also. in that case:

Total of cash will be= 468624+6000= 474624

No Date General journal Debit Credit Comments 1 1-Jun-16 Cash 468624 Cash received= 480000*97.63% Discount on bonds payable 11376 Par value- cash received To Bonds payable 480000 Par value of bonds payable 1 1-Jun-16 Cash 6000 Accrued interest received on bonds issued for 3 months Bond interest expense 6000 480000*5%*3/12 2 1-Sep-16 Bond interest expense 12000 Interest paid for 6 months Cash 12000 480000*5%*6/12 3 1-Sep-16 Bond interest expense 144 Amortization of discount on bonds payable for 3 months of 19.75 years total life Discount on bonds payable 144 11376/19.75 *3/12 4 31-Dec-16 Bond interest expense 8192 Amortisation plus accrued interest expense Interest on bonds payable 8000 480000*5%*4/12 Discount on bonds payable 192 11376/19.75 *4/12 5 31-Dec-16 Profit and loss A/c 14336 Closed net bond interest expense Bond interest expense 14336 -6000+12000+144+8192 5 1-Jan-17 Bond interest expense 8192 Reversal of adjusting entry Interest on bonds payable 8000 Reversal of adjusting entry Discount on bonds payable 192 Reversal of adjusting entry 6 1-Mar-17 Bond interest expense 12288 Interest paid plus amortisation Cash 12000 480000*5%*6/12 Discount on bonds payable 288 11376/19.75 *6/12

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.