Question

Yak Corporation Iaued 4%, 10-yaar bands with a faca alue of $1300,000 at a prica of90 an July 1,2019. Ths bonds pay ibera each January 1 and July 1. Yak uses tha stralght-ha amartzadian mathad fer al hond premlums and dcounts Tha company ha acal year dDamber 31 requiramants 1.2018 (Recnrd ram any journal Journal Entry Date ocounts redit J1 Cash 1 170 000 ia count on Honts Havaria 130 000 Honda Payabla 1300 00 31, 2018. Reod debi Exdlude explaneions from ournal Debit Credit 2018 Dec 3nes Expens Fruonorte Parable Intarcst Payabla hoose from any list or enter any number In the Input elds and then click Check Answer

Answer 1

Journal entry

Date	Accounts	Debit	Credit
Dec-31	Interest expense	$     32,500.00
	Discount on bonds payable		$      6,500.00
	Interest payable		$    26,000.00

Working

Bond issue price	$   11,70,000.00
Face value	$   13,00,000.00
Discount on bond	$      1,30,000.00
Number of Interest payments (10 years x 2)	20
Discount to be amortized per payment	$            6,500.00
Interest on bond	$         26,000.00