Question

Required information [The following information applies to the questions displayed below.] On January 1, 2021, Splash City issues $410,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 8%, the bonds will issue at $450,576. 2. 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. Round your final answers to the nearest whole dollar.) View transaction list Journal entry worksheet Record the bond issue. Note: Enter debits before credits. General Journal Debit Credit Date January 01, 2021 Record entry Clear entry View general journal

Answer 1

Journal Entries:

	Date	Account title and Explanation	Debit	Credit
1	January 1,2021	Cash	$450,576
		Bonds payable		$410,000
		Premium on bonds payable		$40,576
		[To record bond issue]
2	June 30,2021	Interest expense [450,576 x 8% x 6/12]	$18,023
		Premium on bonds payable	$427
		Cash [410,000 x 9% x 6/12]		$18,450
		[To record first interest payment]
3	December 31,2021	Interest expense [(450,576-427) x 8% x 6/12]	$18,006
		Premium on bonds payable	$444.00
		Cash [410,000 x 9% x 6/12]		$18,450
		[To record second interest payment]