Journal entry | ||||||||||
Date | General Journal | Debit | Credit | |||||||
1/1/2019 | Cash | 3,456,448 | ||||||||
discount on bonds | 543,552 | |||||||||
bonds payable | 4,000,000 | |||||||||
2-a) | par maturity value | Annual rate | / | year | semi annual cash payment | |||||
4,000,000 | * | 6% | 6./12 | 120000 | ||||||
semi annual | Straight line | |||||||||
2-b) | par value | bonds price | Discount | periods | disc amortization | |||||
4,000,000 | - | 3,456,448 | = | 543,552 | / | 30 | = | 18118 | ||
2-c) | Semi annual cash | Discount | bond interest expense | |||||||
payment | amortization | |||||||||
120,000 | + | 18118 | = | 138,118 | ||||||
3) | total bond interest expense over life of bonds | |||||||||
amount repaid | ||||||||||
30 | payments of | 120,000 | 3600000 | |||||||
par value ant maturity | 4,000,000 | |||||||||
total repaid | 7600000 | |||||||||
less amount borrowed | 3,456,448 | |||||||||
total bond interest expense. | 4,143,552 | |||||||||
(note bond interest expense may differ slightly due to rounding) | ||||||||||
4) | unamort | Carrying | ||||||||
period | discount | value | ||||||||
1/1/2019 | 543,552 | 3,456,448 | ||||||||
6/30/2019 | 525,434 | 3,474,566 | ||||||||
12/31/2019 | 507,315 | 3,492,685 | ||||||||
6/30/2020 | 489,197 | 3,510,803 | ||||||||
12/31/2020 | 471,078 | 3,528,922 | ||||||||
5) | ||||||||||
Date | General Journal | Debit | Credit | |||||||
6/30/2019 | interest expense | 138,118 | ||||||||
Discount on bonds payable | 18,118 | |||||||||
cash | 120,000 | |||||||||
31/12/2019 | ||||||||||
interest expense | 138,118 | |||||||||
discount on bonds payable | 18,118 | |||||||||
cash | 120,000 | |||||||||
I got the answer to req 1,but need help with the rest. thank you. Hillside issues...
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