Yale Corporation issued $60,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1. Yaleamortizes any bond discount or premium using the effective interest amortization method and bond issuance costs are $1,500. If the bonds were soldto yield 9%, provide journal entries to be made at each of the following dates.a. January 1, for issuance of bonds.b. June 30, for the first interest payment.• Note: Round your answers to the nearest whole dollar.Datea. Jan. 1Account NameCashDiscount on Bonds PayableBonds PayableTo record bond issuance.b. June 30 Interest ExpenseCashDiscount on Bonds PayableTo record interest payment.> > >Dr.54,5975,40302,45700Cr.0✔0x60,000✔0x2,400 ✓57 x

A Bond is a fixed-income investment that represents a loan made by an investor to a borrower,…

mortizes any bond discount or premium using the effective o yield 9%, provide journal entries to be made at each of the January 1, for issuance of bonds. June 30, for the first interest payment. Note: Round your answers to the nearest whole dollar.

mortizes any bond discount or premium using the effective o yield 9%, provide journal entries to be made at each of the January 1, for issuance of bonds. June 30, for the first interest payment. Note: Round your answers to the nearest whole dollar.

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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Question

Yale Corporation issued $60,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1. Yale
amortizes any bond discount or premium using the effective interest amortization method and bond issuance costs are $1,500. If the bonds were sold
to yield 9%, provide journal entries to be made at each of the following dates.
a. January 1, for issuance of bonds.
b. June 30, for the first interest payment.
• Note: Round your answers to the nearest whole dollar.
Date
a. Jan. 1
Account Name
Cash
Discount on Bonds Payable
Bonds Payable
To record bond issuance.
b. June 30 Interest Expense
Cash
Discount on Bonds Payable
To record interest payment.
> > >
Dr.
54,597
5,403
0
2,457
0
0
Cr.
0✔
0x
60,000✔
0x
2,400 ✓
57 x

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