### Bond Transactions on Technicians Credit Union (TCU)**Scenario Overview:**On January 1, 2018, Technicians Credit Union (TCU) issued 5% 20-year bonds with a face value of $100,000. These bonds pay interest semi-annually on June 30 and December 31. The issue price of the bonds is 106. The objective is to journalize the following bond transactions.**Transactions to Record:**1. **Issuance of the Bonds** - **Date:** January 1, 20182. **Payment of Interest and Amortization** - **Date:** June 30, 20183. **Payment of Interest and Amortization** - **Date:** December 31, 20184. **Retirement of the Bond at Maturity** - **Date:** December 31, 2037 - **Note:** Assume the last interest payment has already been recorded.**Assumptions:**- Bonds payable are amortized using the straight-line amortization method.- Record debits first, then credits.- Select explanations on the last line of the journal entry.- Round your answers to the nearest whole dollar.### Detailed Steps for Recording:1. **More Info Dialog Box:** - This informational dialog provides additional details needed for the journal entries: a. Issuance of the bonds on January 1, 2018. b. Payment of interest and amortization on June 30, 2018. c. Payment of interest and amortization on December 31, 2018. d. Retirement of the bond at maturity on December 31, 2037, assuming the last interest payment has already been recorded.**Instructions:**- Click on the provided icon to view detailed bond transactions.- Carefully enter the required information, ensuring accuracy and alignment with accounting principles.### Explanation of Terms:- **Straight-Line Amortization Method:** A method where an equal amount of bond premium or discount is amortized over each period.- **Face Value:** The principal amount of the bond to be repaid at maturity.- **Issue Price:** The price at which bonds are issued, which may be above (premium) or below (discount) the face value.This section is intended to guide students in understanding and managing bond transactions within an

Premium on Bonds Payable = Face value of Bonds - Issue price = $100000 - $100000*106% = $6000No. Date Accounts Debit Credit a. Jan. 1, 2018 Cash $106,000 Premium on Bonds Payable $6000 Bonds Payable $100,000 b. June 30, 2018 Interest expense $2350 Premium on Bonds Payable [(6000/20)*6/12] $150 Cash (100000*5%*6/12) $2500 c. Dec 31, 2018 Interest expense $2350 Premium on Bonds Payable [(6000/20)*6/12] $150 Cash (100000*5%*6/12) $2500 d. Dec. 31, 2037 Bonds Payable $100000 Cash $100000

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On January 1, 2018, Technicians Credit Union (TCU) issued 5%, 20-year bonds payable with face value of $100,000. These bonds pay interest on June 30 and December 31. The issue price of the bonds is 106. Journalize the following bond transactions: O (Click the icon to view the bond transactions.) (Assume bonds payable are amortized using the straight-line amortization method. Record debits first, then credits. Select explanations on the last line of the journal entry. Round your answers to the nearest whole dollar.) A More Info Issuance of the bonds on January 1, 2018. b. Payment of interest and amortization on June 30, 2018. c. Payment of interest and amortization on December 31, 2018. d. Retirement of the bond at maturity on December 31, 2037, assuming the last interest payment has already been recorded.

On January 1, 2018, Technicians Credit Union (TCU) issued 5%, 20-year bonds payable with face value of $100,000. These bonds pay interest on June 30 and December 31. The issue price of the bonds is 106. Journalize the following bond transactions: O (Click the icon to view the bond transactions.) (Assume bonds payable are amortized using the straight-line amortization method. Record debits first, then credits. Select explanations on the last line of the journal entry. Round your answers to the nearest whole dollar.) A More Info Issuance of the bonds on January 1, 2018. b. Payment of interest and amortization on June 30, 2018. c. Payment of interest and amortization on December 31, 2018. d. Retirement of the bond at maturity on December 31, 2037, assuming the last interest payment has already been recorded.

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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