ear ends on June 30. Journalize the following transactions for Sunset Industries, including an e of the bonds on January 1, 2020. of interest expense and amortization of bonds on June 30, 2020. (Use the straight-line amor nt of the first semi-annual interest amount on July 1, 2020.
ear ends on June 30. Journalize the following transactions for Sunset Industries, including an e of the bonds on January 1, 2020. of interest expense and amortization of bonds on June 30, 2020. (Use the straight-line amor nt of the first semi-annual interest amount on July 1, 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
4
![Sunset Industries Ltd. borrowed money by issuing a $50,000 6.3%, 10-year bond. Assume that Sunset Industries issued the bond on January 1, 2020, at a price of 91. Also assume that Sunset Industries's
accounting year ends on June 30. Journalize the following transactions for Sunset Industries, including an explanation for each entry:
a. Issuance of the bonds on January 1, 2020.
b. Accrual of interest expense and amortization of bonds on June 30, 2020. (Use the straight-line amortization method, and round amounts to the nearest dollar.)
c. Payment of the first semi-annual interest amount on July 1, 2020.
a. Journalize the issuance of the bonds on January 1, 2020. (Record debits first, then credits. Enter explanations on the last line.)
Accounts and Explanation
Debit
Date
January 1, 2020
Cash
Bonds Payable
...
To issue bonds at face value.
91
Credit
91
Cloar all
Final check](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e37d0a9-74c8-4250-9a21-add329f5d305%2F216e4cd8-f70b-49c5-b0cc-f691ad93db22%2F0shkyva_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sunset Industries Ltd. borrowed money by issuing a $50,000 6.3%, 10-year bond. Assume that Sunset Industries issued the bond on January 1, 2020, at a price of 91. Also assume that Sunset Industries's
accounting year ends on June 30. Journalize the following transactions for Sunset Industries, including an explanation for each entry:
a. Issuance of the bonds on January 1, 2020.
b. Accrual of interest expense and amortization of bonds on June 30, 2020. (Use the straight-line amortization method, and round amounts to the nearest dollar.)
c. Payment of the first semi-annual interest amount on July 1, 2020.
a. Journalize the issuance of the bonds on January 1, 2020. (Record debits first, then credits. Enter explanations on the last line.)
Accounts and Explanation
Debit
Date
January 1, 2020
Cash
Bonds Payable
...
To issue bonds at face value.
91
Credit
91
Cloar all
Final check
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