Question

Exercise 9-10A Record bonds issued at face amount and related semiannual interest (LO9-5) On January 1, 2021, White Water issues $520,000 of 5% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Required: Assuming the market interest rate on the issue date is 5%, the bonds will issue at $520,000. Record the bond issue on January 1, 2021, and the first two semiannual interest payments on June 30, 2021, and December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 Record the bond issue. Note: Enter debits before credits General Journal Date Debit Credit January 01, 2021 Clear entry Record entry View general journal

There are 3 entries to record:

1. Record the Bond issue

2. Record the first semiannual interest payment

3. Record the second semiannual interest payment

Answer 1

Solution

Date	Account Title and Explanation	Debit	Credit
January 01, 2021	Cash	$ 520,000
	Bonds payable		$ 520,000
	(To record Issuance of bonds )
June 30, 2021	Bond interest expense	$ 13,000
	Cash		$ 13,000
	(Interest on bond paid)
December 31, 2021	Bond interest expense	$ 13,000
	Cash		$ 13,000
	(Interest on bond paid)

.The interest is paid $2.5% on 520000.

There is no premium or discount account since bond are issued at par