Question

Snap Company issues 9%, five-year bonds, on January 1 of this year, with a par value of $80,000 and semiannual interest payments Semiannual Period-End January 1, issuance June 30, first payment December 31, second payment Carrying Value $72,100 Unamortized Discount $ 7,900 (0) (1) (2) 7,110 72,890 6,320 73,680 Use the above bond amortization table and prepare journal entries to record (a) the issuance of bonds on January 1, (b) the first interest payment on June 30, and (c) the second interest payment on December 31 View transaction list Journal entry worksheet K 2 1 3 Record the interest payment and amortization on December 31 Note: Enter debits before credits. Date Credit General Journal Debit December 31

Answer 1

		Debit	Credit
January 1	Cash	72100
	Discount on Bonds payable	7900
	Bonds payable		80000
June 30	Interest expense	4390
	Discount on Bonds payable		790	=7900-7110
	Cash		3600	=80000*9%*6/12
December 31	Interest expense	4390
	Discount on Bonds payable		790	=7110-6320
	Cash		3600	=80000*9%*6/12