Yale Corporation issued $36,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1. Yale amortizes any bond discount or premium using the effective interest amortization method. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates. a. January 1, for issuance of bonds. b. June 30, for the first interest payment. • Note: Round your answer to the nearest whole dollar. Date a. Jan. 1 Account Name Cash Discount and Debt Issuance Costs Bonds Payable To record the issuance of bonds. b. June 30 Interest Expense Discount on Bonds Payable Cash To record the first interest payment. V V V V V Dr. 38,558 2,558 0 1,515 0 0 Cr. 0x 0x 36,000✔ 0✔ 75 ✓ 1,440✔
Yale Corporation issued $36,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1. Yale amortizes any bond discount or premium using the effective interest amortization method. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates. a. January 1, for issuance of bonds. b. June 30, for the first interest payment. • Note: Round your answer to the nearest whole dollar. Date a. Jan. 1 Account Name Cash Discount and Debt Issuance Costs Bonds Payable To record the issuance of bonds. b. June 30 Interest Expense Discount on Bonds Payable Cash To record the first interest payment. V V V V V Dr. 38,558 2,558 0 1,515 0 0 Cr. 0x 0x 36,000✔ 0✔ 75 ✓ 1,440✔
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
7
Transcribed Image Text:Recording Bonds Issued at a Discount-Effective Interest
Yale Corporation issued $36,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1. Yale amortizes any bond discount or premium using the effective interest
amortization method. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates.
a. January 1, for issuance of bonds.
b. June 30, for the first interest payment.
• Note: Round your answer to the nearest whole dollar.
Date
a. Jan. 1
Account Name
Cash
Discount and Debt Issuance Costs
Bonds Payable
To record the issuance of bonds.
b. June 30 Interest Expense
Discount on Bonds Payable
Cash
To record the first interest payment.
Dr.
38,558
2,558
0
1,515
0
0
Cr.
0x
0x
36,000
0✔
75 ✔
1,440✔
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