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Yale Corporation issued to Zap Corporation $60,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1, 2020. Assume that the company uses the effective interest amortization method and bond issuance costs are $1,500. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates a. January 1, 2020, for issuance of bonds. b. June 30, 2020, for the interest payment. . • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Date a. Jan. 1, 2020 Account Name Cash Discount and Debt Issuance Costs Bonds Payable b. June 30, 2020 Interest Expense Cash Discount and Debt Issuance Costs + ♦ ✓ ✓ Dr. 54,598 ✔ 5,402 ✔ 0✓ 2,456 x 0✔ 0✓ Cr. 0✔ 0 ✓ 60,000 ✓ 0 ✓ 2,400 ✓ 56 x

Yale Corporation issued to Zap Corporation $60,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1, 2020. Assume that the company uses the effective interest amortization method and bond issuance costs are $1,500. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates a. January 1, 2020, for issuance of bonds. b. June 30, 2020, for the interest payment. . • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Date a. Jan. 1, 2020 Account Name Cash Discount and Debt Issuance Costs Bonds Payable b. June 30, 2020 Interest Expense Cash Discount and Debt Issuance Costs + ♦ ✓ ✓ Dr. 54,598 ✔ 5,402 ✔ 0✓ 2,456 x 0✔ 0✓ Cr. 0✔ 0 ✓ 60,000 ✓ 0 ✓ 2,400 ✓ 56 x

FINANCIAL ACCOUNTING
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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Recording Debt Issuance Costs Yale Corporation issued to Zap Corporation $60,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1, 2020. Assume that the company uses the effective interest amortization method and bond issuance costs are $1,500. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates. a. January 1, 2020, for issuance of bonds. b. June 30, 2020, for the interest payment. • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Date a. Jan. 1, 2020 Account Name Cash Discount and Debt Issuance Costs Bonds Payable b. June 30, 2020 Interest Expense Cash Discount and Debt Issuance Costs ◄► 0 ¶▶▶ ¶ ◄► > Dr. 54,598 5,402 0 2,456 X 0✔ 0 Cr. 0 0 60,000 0✔ 2,400 56 X
Transcribed Image Text:Recording Debt Issuance Costs Yale Corporation issued to Zap Corporation $60,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1, 2020. Assume that the company uses the effective interest amortization method and bond issuance costs are $1,500. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates. a. January 1, 2020, for issuance of bonds. b. June 30, 2020, for the interest payment. • Note: List multiple debits or credits (when applicable) in alphabetical order. • Note: Round your answers to the nearest whole dollar. Date a. Jan. 1, 2020 Account Name Cash Discount and Debt Issuance Costs Bonds Payable b. June 30, 2020 Interest Expense Cash Discount and Debt Issuance Costs ◄► 0 ¶▶▶ ¶ ◄► > Dr. 54,598 5,402 0 2,456 X 0✔ 0 Cr. 0 0 60,000 0✔ 2,400 56 X
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