Exercise 10-4 Straight-Line: Recording bond issuance and discount amortization L
ID: 2573192 • Letter: E
Question
Exercise 10-4 Straight-Line: Recording bond issuance and discount amortization LO P1, P2
Paulson Company issues 6%, four-year bonds, on December 31, 2017, with a par value of $90,000 and semiannual interest payments.
Use the above straight-line bond amortization table and prepare journal entries for the following.
(a) The issuance of bonds on December 31, 2017.
(b) The first interest payment on June 30, 2018.
(c) The second interest payment on December 31, 2018.
Semiannual Period-End Unamortized Discount Carrying Value (0) 12/31/2017 $ 6,533 $ 83,467 (1) 6/30/2018 5,716 84,284 (2) 12/31/2018 4,899 85,101Explanation / Answer
Journal entry :
Date accounts & Explanation debit credit 12/31/2017 Cash a/c 83467 Discount on bonds pyable 6533 Bonds payable a/c 90000 (To record issuance of bonds payable ) 06/30/2018 Interest expenses a/c 3517 Cash a/c 2700 Discount on bonds payable 817 (To record Interest expenses ) 12/31/2018 Interest expenses a/c 3517 Cash a/c 2700 Discount on bonds payable 817 (To record Interest expenses )Related Questions
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