P109A Saylor Company sold $3,000,000, 8%, 10-year bonds on January 1,2017. The b
ID: 2590792 • Letter: P
Question
P109A Saylor Company sold $3,000,000, 8%, 10-year bonds on January 1,2017. The bonds were dated January 1, 2017, and pay interest on January 1. The company uses the straight-line method to amortize premiums or discounts. bond Instructions: a. Prepare the journal entries to record the issuance of the bonds, assuming that the bonds sold at: 1) 103 (Premium) 2) 98 (Discount) b. Prepare Amortization tables for both bonds for the first 3 interest payments 1) 103 (Premium) Bond Carryim Value Interest Premium Premium Periods Payment ExpenseAmortization Carrying Carrying (A-C) (90,000/10) (D-C) 2) 98 (Discount) Discount Discount Bond Value D-C)EC Interest Payment Expense Amortization Carrying Carrying Periods Valee (A+C)(60,000/10)Explanation / Answer
b. 1) Amortization table (103 Premium)
b. 2) Amortization table (98 Premium)
Date Account Titles and Explanation Debit Credit a. 1) Jan. 1, 2017 Cash 3090000 Bonds payable 3000000 Premium on bonds payable 90000 (To record issuance of bonds at premium) a. 2) Jan. 1, 2017 Cash 2940000 Discount on bonds payable 60000 Bonds payable 3000000 (To record issuance of bonds at discount)Related Questions
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