Question

ACC 112 Project 1D Following are independent situations: CALCULATOS INTERVI C E Nicholas Ram Corporation have a $1,500,000 "bond issue dated March 1, 2016 due in 15 years with an annual interest rate of 115. Interest is payable Marchand September 1. On August 1, 2016, the bond was sold for $1,587,500 plus accrued interest. Using the straight-line method, prepare the general journal entries for each of the following: a) The issuance of the bond on August 1, 2016. b) Payment of the semi-annual interest and the amortization of the premium on September 1, 2016. c) Accrual of the interest and the amortization of the premium on December 31, 2016. d) Payment of the semi-annual interest and the amortization of the premium on March 1, 2017

Answer 1

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Date Account Titles Debit Credit 2016 August 1 1656,850 Cash Premium on Bonds Payable Bonds Payable Bond Interest Payable 87,500 1,500,000 68,750 September 1 Bond Interest Expense 13.750 Bemium on Bonds Payable 2,917 Bonds Interest Payable 68,750 Cash 85, 417 December 31 Bond Interest Expense 55,000 Premium on Bonds Payable 1,944 Bond Interest Payable 56,944 2017 Maich I Bond Interest Payable 56,944. Premium on Bonds Payable 972 Bond Interest Expense 21,500 Cash 85,416