Gridley Company issued $988,000, 12%, 10-year bonds on December 31, 2014, for $928,720. Interest is payable semiannually on June 30 and December 31. Gridley Company uses the straight-line method to amortize bond premium or discount. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2014 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the payment of interest and the discount amortization on June 30, 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit June 30, 2015 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the payment of interest and the discount amortization on December 31, 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2015 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit

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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Gridley Company issued $988,000, 12%, 10-year bonds on December 31, 2014, for $928,720. Interest is payable semiannually on June 30 and December 31. Gridley Company uses the straight-line method to amortize bond premium or discount.

Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2014

SHOW LIST OF ACCOUNTS

Prepare the journal entry to record the payment of interest and the discount amortization on June 30, 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
June 30, 2015

SHOW LIST OF ACCOUNTS

Prepare the journal entry to record the payment of interest and the discount amortization on December 31, 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2015

SHOW LIST OF ACCOUNTS

Prepare the journal entry to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

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