**Volunteer Inc. Bond Transactions Journal Entries**Volunteer Inc. issued bonds with a $650,000 face value, 12% interest rate, and a 4-year term on July 1, 2018, and received $700,000. Interest is payable annually. The premium is amortized using the straight-line method.**A. July 1, 2018: Entry to record issuing the bonds**- **Cash**: $700,000- **Bonds Payable**: $650,000- **Premium on Bonds Payable**: $50,000**B. June 30, 2019: Entry to record payment of interest to bondholders**- **Interest Expense**: $75,000- **Cash**: $78,750**C. June 30, 2019: Entry to record amortization of premium**- **Premium on Bonds Payable**: $12,500**D. June 30, 2020: Entry to record payment of interest to bondholders**- **Interest Expense**: $75,000- **Cash**: $78,750**E. June 30, 2020: Entry to record amortization of premium**- **Premium on Bonds Payable**: $12,500**Instructions:**Prepare journal entries for the above transactions. If an amount box does not require an entry, leave it blank.This setup demonstrates how to record the issuance of bonds at a premium and the subsequent annual interest payments and premium amortization over the term of the bond using the straight-line method.

Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…

Volunteer Inc. issued bonds with a $650,000 face value, 12% interest rate, and a 4-year term on July 1, 2018 and received $700,000. Interest is payable annually. The premium is amortized using the straight-line method A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium Prepare journal entries for the above transactions. If an amount box does not require an entry, leave it blank. A. July 1, 2018 Cash Bonds Payable Premium on Bonds Payable B. June 30, 2019 Interest Expense Cash C. June 30, 2019 Premium on Bonds Payable Interest Expense D. June 30, 2020 Interest Expense Cash E. June 30, 2020 Premium on Bonds Payable Interest Expense 86

Volunteer Inc. issued bonds with a $650,000 face value, 12% interest rate, and a 4-year term on July 1, 2018 and received $700,000. Interest is payable annually. The premium is amortized using the straight-line method A. July 1, 2018: entry to record issuing the bonds B. June 30, 2019: entry to record payment of interest to bondholders C. June 30, 2019: entry to record amortization of premium D. June 30, 2020: entry to record payment of interest to bondholders E. June 30, 2020: entry to record amortization of premium Prepare journal entries for the above transactions. If an amount box does not require an entry, leave it blank. A. July 1, 2018 Cash Bonds Payable Premium on Bonds Payable B. June 30, 2019 Interest Expense Cash C. June 30, 2019 Premium on Bonds Payable Interest Expense D. June 30, 2020 Interest Expense Cash E. June 30, 2020 Premium on Bonds Payable Interest Expense 86

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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