Question

Legacy issues $620,000 of 9.5%, four year bonds dated January 1,2019...

Help Save & Exit Checi art 1 of 4 Required information Problem 10-4A Straight-Line: Amortization of bond discount LO P2 The following information applies to the questions displayed below! Legacy issues $620,000 of 9.5%, four year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $571,867 when the market rate is 12% Problem 10-4A Part 1 eBook Required: 1. Prepare the January 1 journal entry to record the bonds' issuance. View transaction list Journal entry worksheet References Record the issue of bonds with a par value of $620,000 on January 1, 2019 at an issue price of $571,867. Note: Enter debits before credits General Journal Debit Credit Prev 1 2 3 4 of 4 ! Next > MacBook Air

Answer 1

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Requirement 1
Jan 1	Cash	$         571,867
	Discount on Bond Payable	$           48,133
	Bond Payable		$       620,000
Requirement 2
2a	$                                                      620,000	x	9.5%	x	6/12	=	$      29,450
2b	$                                                      620,000	-	$       571,867	=	$       48,133	/	8	=	$       6,017
2c	$                                                        29,450	+	$            6,017	=	$       35,467
Requirement 3
8 Payment of	$                                                        29,450	$         235,600
Par value		$         620,000
Total Repaid		$         855,600
Less: Amount borrowed		$      (571,867)
Total bond int expense		$         283,733
Requirement 4
1/1/2019	$                                                        48,133	$         571,867
6/30/2019	$                                                        42,116	$         577,884
12/31/2019	$                                                        36,100	$         583,900
6/30/2019	$                                                        30,083	$         589,917
12/31/2019	$                                                        24,067	$         595,934
Requirement 5
Jun 30	Interest Expense	$           35,467
	Discount on Bond Payable		$            6,017
	Cash		$         29,450
Dec 31	Interest Expense	$           35,467
	Discount on Bond Payable		$            6,017
	Cash		$         29,450