Exercise 14-8 (Algo) Straight-Line: Recording bond issuance and premium amortization LO P3Wookie Company issues 8%, five-year bonds, on January 1 of this year, with a par value of $108,000 and semiannual interestpayments.Semiannual Period-End(0) January 1, issuance.(1) June 30, first payment(2) December 31, second paymentUse the above straight-line bond amortization table and prepare journal entries for the following.(a) The issuance of bonds on January 1.(b) The first interest payment on June 30.(c) The second interest payment on December 31.Unamortized Premium$ 8,2717,4446,617Carrying Value$ 116,271115,444114,617

Bond:A bond is a fixed-income investment that represents a loan made by an investor to a borrower,…

Answered: (a) The issuance of bonds on January 1.…

(a) The issuance of bonds on January 1. (b) The first interest payment on June 30. (c) The second interest payment on December 31.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

Exercise 14-8 (Algo) Straight-Line: Recording bond issuance and premium amortization LO P3
Wookie Company issues 8%, five-year bonds, on January 1 of this year, with a par value of $108,000 and semiannual interest
payments.
Semiannual Period-End
(0) January 1, issuance.
(1) June 30, first payment
(2) December 31, second payment
Use the above straight-line bond amortization table and prepare journal entries for the following.
(a) The issuance of bonds on January 1.
(b) The first interest payment on June 30.
(c) The second interest payment on December 31.
Unamortized Premium
$ 8,271
7,444
6,617
Carrying Value
$ 116,271
115,444
114,617

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