Yale Corporation issued $60,000, 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 7%, provide journal entries to be made at each of the following dates. a. January 1, for issuance of bands. b. June 30, for the first interest payment.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Recording Bonds Issued at a Premium-Effective Interest
Yale Corporation issued $60,000, 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 7%, 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
Cash
Account Name
Discount on Bonds Payable
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.
56,098
5,402
0
1,911
0
0
Cr.
0x
0x
60,000 ✓✔
0x
57 x
2.400✔
Transcribed Image Text:Recording Bonds Issued at a Premium-Effective Interest Yale Corporation issued $60,000, 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 7%, 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 Cash Account Name Discount on Bonds Payable 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. 56,098 5,402 0 1,911 0 0 Cr. 0x 0x 60,000 ✓✔ 0x 57 x 2.400✔
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