Question

Paulson Company issues 9%, four-year bonds, on December 31, 2018, with a par value of $99,000 and semiannual interest payments. Semiannual Period-End (0) 12/31/2018 (1) 6/30/2019 (2) 12/31/2019 Unamortized Discount $6,713 5,874 5,035 Carrying Value $ 92,287 93,126 93,965 Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on December 31, 2018 (b) The first interest payment on June 30, 2019. (c) The second interest payment on December 31, 2019. View transaction list Journal entry worksheet < 1 2 3 Record the issue of bonds with a par value of $99,000 cash December 31, 2018. Note: Enter debits before credits. General Journal Debit Credit Date Dec 31, 2018 Record entry Clear entry View general journal

Answer 1

Dec. 31/ Cash Journal entries Date General Journa Debid Credil $92,287 2018 Discount on bonds payable le 6713 Bonds payable 14 99000 June 30 Bond onterest expenses $5294 2019 Discount en bonds payable - $ 839 1 cash. $ 4455 Dec. 31 Bond interest expenses is 5294 2019 Discount on bonde payable - 18 839 & 4455 Explanations : b) June 30 : Discount on bonds payable 2011 = ($ 6713 - $ 5874) Cash 4 839 Cash = ($99000x90%.* 12) = $ 4455 c) Dec. 3) Discount on bonde pa yable 2019 = ($5874 - $ 5035) - 7839 Cash: ($99000 * 9 .X Y2) = $4455.