On January 31, 2021, Hanover Logistics, Inc., issued ten-year, 12% bonds payable with a face value of $9,000,000. The bonds were issued at 92 and pay interest on January 31 and July 31. Hanover Logistics amortizes bond discounts using the straight-line method. Read the requirement. a. Record the issuance of the bond payable on January 31, 2021. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Jan Date 31 Date July 31 Dec Cash Discount on Bonds Payable Bonds Payable b. Record the payment of semiannual interest and amortization of bond discount on July 31, 2021. Journal Entry Date Interest Expense Accounts Accounts Discount on Bonds Payable Cash 31 Interest Expense Debit 8,280,000 720,000 Accounts Discount on Bonds Payable Interest Payable Debit 576,000 c. Record the interest accrual and discount amortization on December 31, 2021. (Do not round intermediary calculations. Only round the amount you enter into the input field to the nearest whole dollar.) Journal Entry Debit Credit 480,000 9,000,000 Credit 36,000 540,000 Credit 30,000 450,000
On January 31, 2021, Hanover Logistics, Inc., issued ten-year, 12% bonds payable with a face value of $9,000,000. The bonds were issued at 92 and pay interest on January 31 and July 31. Hanover Logistics amortizes bond discounts using the straight-line method. Read the requirement. a. Record the issuance of the bond payable on January 31, 2021. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Jan Date 31 Date July 31 Dec Cash Discount on Bonds Payable Bonds Payable b. Record the payment of semiannual interest and amortization of bond discount on July 31, 2021. Journal Entry Date Interest Expense Accounts Accounts Discount on Bonds Payable Cash 31 Interest Expense Debit 8,280,000 720,000 Accounts Discount on Bonds Payable Interest Payable Debit 576,000 c. Record the interest accrual and discount amortization on December 31, 2021. (Do not round intermediary calculations. Only round the amount you enter into the input field to the nearest whole dollar.) Journal Entry Debit Credit 480,000 9,000,000 Credit 36,000 540,000 Credit 30,000 450,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
How do you solve portion B and C. I don't understand the calcuations.
Transcribed Image Text:On January 31, 2021, Hanover Logistics, Inc., issued ten-year, 12% bonds payable with a face value of $9,000,000. The bonds were issued at 92 and pay interest on January 31 and July 31. Hanover Logistics amortizes bond discounts using the straight-line method.
Read the requirement.
a. Record the issuance of the bond payable on January 31, 2021. (Record debits first, then credits. Exclude explanations from any journal entries.)
Journal Entry
Jan
Date
31
Date
July 31
Cash
Discount on Bonds Payable
Bonds Payable
b. Record the payment of semiannual interest and amortization of bond discount on July 31, 2021.
Journal Entry
Date
Dec
Accounts
Interest Expense
Accounts
Discount on Bonds Payable
Cash
Debit
8,280,000
720,000
Accounts
31 Interest Expense
Discount on Bonds Payable
Interest Payable
Debit
576,000
c. Record the interest accrual and discount amortization on December 31, 2021. (Do not round intermediary calculations. Only round the amount you enter into the input field to the nearest whole dollar.)
Journal Entry
Debit
Credit
480,000
9,000,000
Credit
36,000
540,000
C
Credit
30,000
450,000
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