January 1. Crane Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest and the related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020. Date Account Titles and Explanation Debit Credit 1/1/20 Cash Bonds Payable 516,000 Premium on Bonds Payable 7/1/20 Interest Expense Premium on Bonds Payable Cash
January 1. Crane Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest and the related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020. Date Account Titles and Explanation Debit Credit 1/1/20 Cash Bonds Payable 516,000 Premium on Bonds Payable 7/1/20 Interest Expense Premium on Bonds Payable Cash
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...
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![Crane Company issued $516,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and
January 1. Crane Company uses the straight-line method of amortization for bond premium or discount.
Prepare the journal entries to record the following. (if no entry is required, select "No Entry" for the account titles and enter O for the
amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a)
The issuance of the bonds.
(b)
The payment of interest and the related amortization on July 1, 2020.
(c)
The accrual of interest and the related amortization on December 31, 2020.
Date
Account Titles and Explanation
Debit
Credit
1/1/20
Cash
Bonds Payable
516,000
Premium on Bonds Payable
7/1/20
Interest Expense
Premium on Bonds Payable
Cash
12/31/20
Interest Expense
Premium on Bonds Payable
Interest Payable](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc1576e9-c849-48ce-8450-6aba7a1020f2%2Fd645a9ed-9eaf-475a-8a54-a100e0b97cfd%2Fbxzf9_processed.png&w=3840&q=75)
Transcribed Image Text:Crane Company issued $516,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and
January 1. Crane Company uses the straight-line method of amortization for bond premium or discount.
Prepare the journal entries to record the following. (if no entry is required, select "No Entry" for the account titles and enter O for the
amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a)
The issuance of the bonds.
(b)
The payment of interest and the related amortization on July 1, 2020.
(c)
The accrual of interest and the related amortization on December 31, 2020.
Date
Account Titles and Explanation
Debit
Credit
1/1/20
Cash
Bonds Payable
516,000
Premium on Bonds Payable
7/1/20
Interest Expense
Premium on Bonds Payable
Cash
12/31/20
Interest Expense
Premium on Bonds Payable
Interest Payable
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