Question

Wookie Company issues 8%, five-year bonds, on January 1 of this year, with a par value of $92,000 and semiannual interest payments. (0) (1) (2) Semiannual Period-End January 1, issuance June 30, first payment December 31, second payment Unamortized Premium $7,951 7,156 6,361 Carrying Value $99,951 99, 156 98,361 Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on January 1. (b) The first interest payment on June 30. (c) The second interest payment on December 31. View transaction list Journal entry worksheet 2 3 Record the issuance of the bonds on January 1. Note: Enter debits before credits. General Journal Debit Credit Date January 01 Record entry Clear entry View general journal

Answer 1

--Journal entries

Date	Accounts title	Debit	Credit
01-Jan	Cash	$99,951
	Premium on Bonds Payable		$7,951
	Bonds Payable		$92,000
	(to record issuance)
30-Jun	Interest Expense	$2,885
	Premium on Bonds Payable ($7951-7156)	$795
	Cash ($92000 x 8% x 6/12)		$3,680
	(to record #1 interest)
31-Dec	Interest Expense	$2,885
	Premium on Bonds Payable ($7156-6361)	$795
	Cash ($109000 x 7% x 6/12)		$3,680
	(to record #2 interest)