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Presented below is a partial amortization schedule for Discount Pizza. (1) (3) (5) (2) Cash Paid for Interest (4) Increase in

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Answer #1

Solution:

Face amount of bonds payable = $55,000

Issue Price of bonds = $51,092

Discount on Issuance of bonds payable = $55,000 - $51,092 = $3,908

Journal entry to record the bond issue and first interest payment

General Journal

Debit

Credit

Cash

$51,092

Discount on Bonds Payable (bal fig)

$3,908

Bonds Payable

$55,000

(To record the issuance of bonds at discount)

Interest Expense

$1,788

   Interest Payable or Cash Interest

$1,650

   Discount on Bonds Payable (Amortization)

$138

(To record first interest payment)

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