Peplum Show Company issued $600,000 of 10%, 20-year bonds on January 1, 2018 at 102.Interest is payable semi-annually on July 1 and January 1. Peplum Show company useseffective-interest method for amortization of bon discount or premium as the case may be.Assuming effective yield of 9.7705%, prepare journal entry for payment of interest andrelated amortization on July 1, 2018.DateAccount Detail & ExplanationDebitCredit| 1/7/2018 Interest Expense$30,000$102Premium on bonds payableCash$30,102|а.DateAccount Detail & ExplanationDebitCredit|1/7/2018 Interest Expense$60,000$102Premium on bonds payableb.Cash$60,102|DateAccount Detail & ExplanationDebitCredit| 1/7/2018 Interest Expense$29,898|$102Premium on bonds payableCash$30,000с.DateAccount Detail & ExplanationDebitCredit| 1/7/2018 Interest Expense$29,312Premium on bonds payable$102|d.Cash$29,414|

A journal entry is used to record day-to-day transactions of the business by debiting and crediting…

Peplum Show Company issued $600,000 of 10%, 20-year bonds on January 1, 2018 at 102. Interest is payable semi-annually on July 1 and January 1. Peplum Show company uses effective-interest method for amortization of bon discount or premium as the case may be. Assuming effective yield of 9.7705%, prepare journal entry for payment of interest and related amortization on July 1, 2018.

Peplum Show Company issued $600,000 of 10%, 20-year bonds on January 1, 2018 at 102. Interest is payable semi-annually on July 1 and January 1. Peplum Show company uses effective-interest method for amortization of bon discount or premium as the case may be. Assuming effective yield of 9.7705%, prepare journal entry for payment of interest and related amortization on July 1, 2018.

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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