Recording Bond Entries and Reporting Bonds— Effective Interest, Straight-Line Master Corp. issued 5%, $180,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1 and January 1, and were issued to yield 6%. The bonds mature January 1, 2030, and the company uses the effective interest method to amortize bond discounts or premiums. Required a. Prepare journal entries on the following dates. 1. January 1, 2020—Issuance of bonds. 2. July 1, 2020—Interest payment. 3. December 31, 2020—Interest accrual. 4. January 1, 2021—Interest payment. b. Answer part a assuming instead that the company uses the straight-line interest method to amortize discounts and premiums and the bonds were sold on March 1, 2020, for $166,489 (excluding accrued interest). Hint: Amortize discount on bonds payable over a 118 month bond term. Effective Interest Method Straight-Line Interest Method Note: List multiple debits or credits (when applicable) in alphabetical order. Note: Round your answers to the nearest whole dollar. 1. Jan. 1, 2020 Answer Answer Answer Answer Answer Answer Answer Answer Answer 2. Jul. 1, 2020 Answer Answer Answer Answer Answer Answer Answer Answer Answer 3. Dec. 31, 2020 Answer An

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Recording Bond Entries and Reporting Bonds— Effective Interest, Straight-Line

Master Corp. issued 5%, $180,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1 and January 1, and were issued to yield 6%. The bonds mature January 1, 2030, and the company uses the effective interest method to amortize bond discounts or premiums.

Required

a. Prepare journal entries on the following dates.

1. January 1, 2020—Issuance of bonds.

2. July 1, 2020—Interest payment.

3. December 31, 2020—Interest accrual.

4. January 1, 2021—Interest payment.

b. Answer part a assuming instead that the company uses the straight-line interest method to amortize discounts and premiums and the bonds were sold on March 1, 2020, for $166,489 (excluding accrued interest).

Hint: Amortize discount on bonds payable over a 118 month bond term.

Effective Interest Method
Straight-Line Interest Method

Note: List multiple debits or credits (when applicable) in alphabetical order.
Note: Round your answers to the nearest whole dollar.

1.	Jan. 1, 2020	Answer	Answer	Answer
		Answer	Answer	Answer
		Answer	Answer	Answer
2.	Jul. 1, 2020	Answer	Answer	Answer
		Answer	Answer	Answer
		Answer	Answer	Answer
3.	Dec. 31, 2020	Answer	Answer	Answer
		Answer	Answer	Answer
		Answer	Answer	Answer
4.	Jan. 1, 2021	Answer	Answer	Answer
		Answer

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