o.mheducation.com/hm.tpx Legacy issues $580,000 of 8.0%, four-year bonds dated J

Question

o.mheducation.com/hm.tpx Legacy issues $580,000 of 8.0%, four-year bonds dated January 1, 2015, that pay interest semiannually or June 30 and December 31 . They are issued at $507,959 and their market rate is 12% at the issue date. 1. Prepare the January 1, 2015, journal entry to record the bonds' issuance. View transaction list Journal entry worksheet Record the issue of bonds with a par value of $580,000 cash on January 1, 2015 at an issue price of $507,959. Note: Enter debits before credits Debit Credit Date General Journal

Explanation / Answer

1. Bond Journal entry

2. Total bond Interest expense is:

3. Amortization Table

4. First 2 interest entries

Year Particulars L.F Debit ($) Credit ($) 2015 Jan-01 Cash 507,959 Discount on Bonds payable 72,041 Bond Payable 580,000 (For 4 year bonds issued at discount)

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