Question

Wookie Company issues 6%, five-year bonds, on January 1 of this year, with a par value of $107,000 and semiannual interest payments. (0) (1) (2) Semiannual Period-End January 1, issuance June 30, first payment December 31, second payment Unamortized Premium $8,251 7,426 6,601 Carrying Value $115, 251 114,426 113,601 points Use the above straight-line bond amortization table and prepare journal entries for the following. (8 02:21:54 (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 Record the issuance of the bonds on January 1. Note: Enter debits before credits. Date General Journal Debit Credit January 01 Record entry Clear entry View general journal

Answer 1

Answer

Date	General Journal	Debit	Credit
01-Jan	Cash	$115,251
	Premium on Bonds Payable		$8,251
	Bonds Payable		$107,000
	(to record issuance)
30-Jun	Interest Expense	$2,385
	Premium on Bonds Payable ($8251 - 7426)	$825
	Cash ($107000 x 6% x 6/12)		$3,210
	(to record #1 interest)
31-Dec	Interest Expense	$2,385
	Premium on Bonds Payable ($7426 - 6601)	$825
	Cash ($107000 x 6% x 6/12)		$3,210
	(to record #2 interest)