Solution:
Journal Entries | |||
Date | Particulars | Debit | Credit |
1-Jan-21 | Cash Dr | $85,951.00 | |
To Bond Payable | $80,000.00 | ||
To Premium on bond payable | $5,951.00 | ||
(To record equipment purchased) | |||
30-Jun-21 | Interest expense Dr ($85,951*3%) | $2,579 | |
Premium on bond payable Dr | $221 | ||
To Cash ($80,000*3.50%) | $2,800 | ||
(To record interest payment and premium amortization) |
two parts A company issues 7%, 10-year bonds with a face amount of $80,000 for $85.951...
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