Question

Wildhorse Company issued $810,000, 10%, 10-year bonds on December 31, 2019, for $740,000. Interest is payable annually on December 31. Wildhorse Company uses the straight-line method to amortize bond premium or discount.

(a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2019 SHOW LIST OF ACCOUNTS SHOW ANSWER LINK TO TEXT Attempts: 2 of 4 used

(b) Prepare the journal entry to record the payment of interest and the discount amortization on December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Also, there is a part c that I can not view until after submitting part b. if you have any idea what part c could be and have an answer or idea behind it that would be so helpful!

Answer 1

Solution a:

Journal Entries - Wildhorse Co.
Date	Particulars	Debit	Credit
31-Dec-19	Cash Dr	$740,000.00
	Discount on issue of bond Dr	$70,000.00
	To Bond Payable		$810,000.00
	(To record issue of bond at discount)

Solution b:

Journal Entries - Wildhorse Co.
Date	Particulars	Debit	Credit
31-Dec-20	Interest expense Dr	$88,000.00
	To Discount on issue of bond		$7,000.00
	To Cash		$81,000.00
	(To record interest expense and discount amortization)