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Prepare entries for bonds issued at a premium. (LO 5) *BE15-12 Golden Inc. issues $4 million, 5-year, 10% bonds at 102, with
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Answer-1-

Date Account Title and Explanation Debit ($) Credit ($)
Jan.1 Cash

4,080,000
Bonds Payable 4,000,000
Premium on Bonds Payable ($4,000,000*2/100) 80,000
(Issued 4,000 5 year 10% bonds @102 premium)
Dec.31 Interest Expenses ($4,000,000*10%) ($400,000-$16,000) 384,000
Premium on Bonds Payable ($80,000/5years) 16,000
Cash 400,000
(Interest and amortization on premium bonds issued 1/1/17)

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