Woodwick Company issues 9%, five-year bonds, on December 31, 2014, with a par va

Question

Woodwick Company issues 9%, five-year bonds, on December 31, 2014, with a par value of $109,000 and semiannual interest payments Semiannual Period-End Unamortized Premium Carrying Value (0) 12/31/2014 (1) 6/30/2015 (2) 12/31/2015 $8,291 7,462 6,633 $117,291 116,462 115,633 Use the above straight-line bond amortization table and prepare journal entries for the following (a) The issuance of bonds on December 31, 2014 (b) The first interest payment on June 30, 2015 (c) The second interest payment on December 31, 2015 View transaction list Journal entry worksheet Record the issue of bonds with a par value of $109,000 cash on December 31, 2014

Explanation / Answer

Journal entry :

Date accounts and explanation debit credit 2014, dec 31 Cash 117291 Bonds payable a/c 109000 Premium on bonds payable 8291 (To record issue bonds payable) 2015, June 30 Interest expenses a/c 4076 Amortization of Premium on bonds payable (8291/10) 829 Cash a/c (109000*9%*6/12) 4905 (To record interest paid) 2015, Dec 31 Interest expenses 4076 Amortization of Premium on bonds payable (8291/10 829 Cash a/c 4905 (To record interest paid)

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