Bonds Payable Journal Entries; Straight-Line Interest Amortization On December 31, Brown Company issued $750,000 of 20-year, eight percent bonds payable for $621,307, yielding an effective interest rate of ten percent. Interest is payable semiannually on June 30 and December 31. Prepare journal entries to reflect (a) the issuance of the bonds, (b) the semiannual interest payment and discount amortization (straight-line interest method) on June 30, and (c) the semiannual interest payment and discount amortization on December 31. Round answers to the nearest dollar. Date (a) 12/31/Y1 Cash (b) 06/30/Y2 Bond interest expense Check General Journal Description Discount on bonds payable Bonds payable To record issuance of bonds at a discount. (c) 12/31/Y2 Bond interest expense → ✓ + ✔ + + Discount on bonds payable Cash To record semiannual payment and discount amortization. ✓ ✓ + ✓ + ✓ Discount on bonds payable Cash To record semiannual payment and discount amortization. Debit 0x 0 x 0✓ 0x 0✓ 0✔ 0x 0✔ 0✓ Credit 0 ✓ 0✓ 0x 0 ✓ 0 x 0 x 0✔ 0x 0x

Bonds Payable Journal Entries; Straight-Line Interest Amortization On December 31, Brown Company issued $750,000 of 20-year, eight percent bonds payable for $621,307, yielding an effective interest rate of ten percent. Interest is payable semiannually on June 30 and December 31. Prepare journal entries to reflect (a) the issuance of the bonds, (b) the semiannual interest payment and discount amortization (straight-line interest method) on June 30, and (c) the semiannual interest payment and discount amortization on December 31. Round answers to the nearest dollar. Date (a) 12/31/Y1 Cash (b) 06/30/Y2 Bond interest expense Check General Journal Description Discount on bonds payable Bonds payable To record issuance of bonds at a discount. (c) 12/31/Y2 Bond interest expense → ✓ + ✔ + + Discount on bonds payable Cash To record semiannual payment and discount amortization. ✓ ✓ + ✓ + ✓ Discount on bonds payable Cash To record semiannual payment and discount amortization. Debit 0x 0 x 0✓ 0x 0✓ 0✔ 0x 0✔ 0✓ Credit 0 ✓ 0✓ 0x 0 ✓ 0 x 0 x 0✔ 0x 0x

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Subject : Accounting
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