Question

Blossom Company issued $710.000. 12%. 10-year hands on December 31, 2019, for $640,000 Interest is payable annually on December 31. Blossom Company uses the straight-line method to amortize bond premium or discount. 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.) Debit Credit Date Account Titles and Explanation Dec. 31, 2019 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.) Debit Credit Date Account Titles and Explanation Dec. 31, 2020 Prepare the journal entry to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Dec. 31, 2029 Question Attempts: 0 of 5 use Copyright © 2000-2020 by John Wiley & Sons, Inc. or related companies. All rights reserved.

Answer 1

Date	Accounts Titles & Explanation	Debit	Credit
Dec 31, 2019	Cash	$640,000
	Discount on bonds payable	$70,000
	Bonds Payable		$710,000
	(To record issue of bonds)
Dec 31, 2020	Interest expense	$92,200
	Discount on bonds payable ($70,000 / 10 )		$7,000
	Cash ($710,000 x 12%)		$85,200
	(To record interest expenses)
Dec 31, 2029	Bonds Payable	$710,000
	Cash		$710,000