Question

Exercise Help Save Submit Check my work Wookie Company issues 7%, five year bonds, on January 1 of this year with a par value of $101.000 and semiannual interest payments Unte Catal O) (1) (2) Selamat Period End January 1, issuance June 30, first payment December 31, second payment 7,318 5.505 103.31 101.505 Use the above straight-line bond amortization table and prepare journal entries for the following (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 View ouma entry worksheet Debit Credit No Date 109131 January 01 General Journal Cash Premium on bonds payable Bonds payable June 30 Bond interest expense Premium on bonds payable Cash December 31 Bond interest expense Premium on bonds payable < Prey 5 of 7 Next >

Answer 1

Solution:

Journal Entries
Date	Particulars	Debit	Credit
01-Jan	Cash A/c Dr	$1,09,131
	To Premium on bond payable		$8,131
	To bonds payable		$1,01,000
30-Jun	Interest Expense Dr	$2,722
	Premium on Bond payable Dr (8131- 7318)	$813
	To Cash ($101000*7%*6/12)		$3,535
31-Dec	Interest Expense Dr	$2,722
	Premium on Bond payable Dr (7318- 6505)	$813
	To Cash ($101000*7%*6/12)		$3,535