Entries for issuing bonds and amortizing premium by straight-line method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $6,400,000 of 4-year, 7% bonds at a market (effective) rate of 5%, receiving cash of $6,858,887. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. Credit Cash Account Premium on Bonds Payable Bonds Payable Cash Interest Expense Premium on Bonds Payable Account Feedback Debit ✓ 6,858,887 b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round t the nearest dollar. If an amount box does not require an entry, leave it blank.. Debit Credit 0 0 0 6,400,000 4 inn is reflected in a premium or discount account
Entries for issuing bonds and amortizing premium by straight-line method Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $6,400,000 of 4-year, 7% bonds at a market (effective) rate of 5%, receiving cash of $6,858,887. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. Credit Cash Account Premium on Bonds Payable Bonds Payable Cash Interest Expense Premium on Bonds Payable Account Feedback Debit ✓ 6,858,887 b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round t the nearest dollar. If an amount box does not require an entry, leave it blank.. Debit Credit 0 0 0 6,400,000 4 inn is reflected in a premium or discount account
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Entries for issuing bonds and amortizing premium by straight-line method
Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $6,400,000 of 4-year, 7% bonds at a market (effective) interest
rate of 5%, receiving cash of $6,858,887. Interest is payable semiannually on April 1 and October 1.
a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank.
Cash
Account
Premium on Bonds Payable
Bonds Payable
Cash
Interest Expense
Premium on Bonds Payable
Account
Feedback
Debit
Check My Work
6,858,887
0
b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round to
the nearest dollar. If an amount box does not require an entry, leave it blank.
Debit
0
Credit
000
0
6,400,000
Credit
nt fare value. Any difference in issue price is reflected in a premium or discount account.
tion over the life of the bond.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcc951479-387e-4d42-916e-169b7920bd18%2Fa57a025f-0a43-48ac-857c-68ab288682f3%2Fdcfnpwy_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Entries for issuing bonds and amortizing premium by straight-line method
Smiley Corporation wholesales repair products to equipment manufacturers. On April 1, 20Y1, Smiley issued $6,400,000 of 4-year, 7% bonds at a market (effective) interest
rate of 5%, receiving cash of $6,858,887. Interest is payable semiannually on April 1 and October 1.
a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank.
Cash
Account
Premium on Bonds Payable
Bonds Payable
Cash
Interest Expense
Premium on Bonds Payable
Account
Feedback
Debit
Check My Work
6,858,887
0
b. Journalize the entry to record the first interest payment on October 1, 20Y1, and amortization of bond premium for 6 months, using the straight-line method. Round to
the nearest dollar. If an amount box does not require an entry, leave it blank.
Debit
0
Credit
000
0
6,400,000
Credit
nt fare value. Any difference in issue price is reflected in a premium or discount account.
tion over the life of the bond.
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