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. 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, for issuance of bonds. b. June 30, for the first interest payment. • Note: Round your answer to the nearest whole dollar. Date Account Name Dr. Cr. a. Jan. 1 Cash 54,597 Discount on Bonds Payable 2,374 x Bonds Payable 60,000 v To record bond issuance. b. June 30 Interest Expense Discount on Bonds Payable Cash 0 x To record interest. payment. > > >

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. 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, for issuance of bonds. b. June 30, for the first interest payment. • Note: Round your answer to the nearest whole dollar. Date Account Name Dr. Cr. a. Jan. 1 Cash 54,597 Discount on Bonds Payable 2,374 x Bonds Payable 60,000 v To record bond issuance. b. June 30 Interest Expense Discount on Bonds Payable Cash 0 x To record interest. payment. > > >

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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