Homework Answers
a) Journal entry
| Date | account and explanation | Debit | Credit |
| Jan 1 | Cash (4000000*1.03) | 4120000 | |
| Bonds payable | 4000000 | ||
| Premium on bonds payable | 120000 | ||
| July 1 | Interest expense | 154000 | |
| Premium on bonds payable (120000/20) | 6000 | ||
| Cash (4000000*8%*6/12) | 160000 | ||
| Dec 31 | Interest expense | 154000 | |
| Premium on bonds payable | 6000 | ||
| Interest payable | 160000 | ||
a) Journal entry
| Date | account and explanation | Debit | Credit |
| Jan 1 | Cash (4000000*.96) | 3840000 | |
| Discount on bonds payable | 160000 | ||
| Bonds payable | 4000000 | ||
| July 1 | Interest expense | 168000 | |
| Discount on bonds payable (160000/20) | 8000 | ||
| Cash (4000000*8%*6/12) | 160000 | ||
| Dec 31 | Interest expense | 168000 | |
| Discount on bonds payable | 8000 | ||
| Interest payable | 160000 | ||
c) Balance sheet presentation : When issued at 103
| Current liabilities | ||
| Interest payable | 160000 | |
| Long term liabilities | ||
| Bonds payable | 4000000 | |
| Add: Premium on bonds payable | 108000 | 4108000 |
c) Balance sheet presentation : When issued at 96
| Current liabilities | ||
| Interest payable | 160000 | |
| Long term liabilities | ||
| Bonds payable | 4000000 | |
| Less: Discount on bonds payable | -120000 | 3880000 |
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(1.) Prepare journal entries to record the issuance of
the bonds and bond interest expense for 2022, assuming that the
bonds sold at 95
(2.) Show the balance sheet presentation for the bond
issue at December 31, 2022, using the 107 selling
price....
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(1.) Prepare journal entries to record the issuance of
the bonds and bond interest expense for 2022, assuming that the
bonds sold at 95
(2.) Show the balance sheet presentation for the bond
issue at December 31, 2022, using the 107 selling
price....
Saylor Co. sold $3,000,000, 8%, 10-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on January 1. The company uses straight-line amortization on bond premiums and discounts. Financial statements are prepared annually. Your answer is partially correct. Prepare the journal entries to record the issuance of the bonds assuming they sold at: (1) 103 and (2) 98. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date...
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