On January 1, 2015, Dollartree Corp. issued $930.000 par value, 6%, three-year b

Question

On January 1, 2015, Dollartree Corp. issued $930.000 par value, 6%, three-year bonds when the market rate of interest was 6%. Interest is payable semiannually each June 30 and December 31. Dollartree incurred bond issue costs of $22,000 (Click the icon to view the Future E Value of S1 table.) (Click the icon to view the Future Value of an Ordinary Annuity table.) (Click the icon to view the Future Value of an Annuity Due table.) (Click the icon to view the Present Value of S1 table.) (Click the icon to view the Present Value of an Ordinary Annuity table.) (Click the icon to view the Present Value of an Annuity Due table.) Under IFRS, what is the journal entry when Dollartree issued the bonds? (Record debits first then credits. Exclude explanations from any journal entries.) Account January 1. 2015

Explanation / Answer

Dollartree Corp. Journal Entry Date Account Debit Credit 1/1/2015 Cash $ 930,000.00    To Bonds Payable $ 930,000.00 (Being amount of 6% 3 years bonds issued) 1/1/2015 Bonds issued cost $    22,000.00 To Cash $    22,000.00 (being amount of bonds issued cost) Note: Bonds issued cost is capitalized in the year of   cost incurred and after that in each next 3 years in this case debited bonds expense and credited bonds issued cost.

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