Question

On January 1, 2018, Eastside Credit Union (ECU) issued 5%, 20-year bonds payable with face value of $200,000. These bonds pay interest on June 30 and December 31. The issue price of the bonds is 101. Journalize the following bond transactions: A (Click the icon to view the bond transactions.) (Assume bonds payable are amortized using the straight-line amortization method. Record debits first, then credits. Select explanations on the last line of the journal entry. Round your answers to the nearest whole dollar.) a. Journalize the issuance of the bonds on January 1, 2018. Date Accounts and Explanation Debit Credit More Info 2018 Jan. 1 a. Issuance of the bonds on January 1, 2018. b. Payment of interest and amortization on June 30, 2018. c. Payment of interest and amortization on December 31, 2018. d. Retirement of the bond at maturity on December 31, 2037, assuming the last interest payment has already been recorded. Print Done

Please answer all parts A-D

Answer 1

1) Journal entry

No	Date	Account and explanation	Debit	Credit
a	Jan 1	Cash (200000*1.01)	202000
		Bonds payable		200000
		Premium on bonds payable		2000
b	June 30	Interest expense	4950
		Premium on bonds payable (2000/40)	50
		cash (200000*5%*6/12)		5000
c	Dec 31	Interest expense	4950
		Premium on bonds payable	50
		Cash		5000
d	Dec 31,2037	Bonds payable	200000
		Cash		200000

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Assumption 1

Date	account and explanation	Debit	Credit
Jan 1	Cash	85000
	Bonds payable		85000
June 30	Interest expense (85000*10%*6/12)	4250
	Cash		4250

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Assumption 2

Date	account and explanation	Debit	Credit
Jan 1	Cash	77074
	Discount on bonds payable	7926
	Bonds payable		85000
June 30	Interest expense (77074*12%*6/12)	4624
	Discount on bonds payable		374
	Cash		4250

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Assumption 3

Date	account and explanation	Debit	Credit
Jan 1	Cash	93938
	Bonds payable		85000
	Premium on bonds payable		8938
June 30	Interest expense (93938*8%*6/12)	3758
	Premium on bonds payable	492
	Cash		4250