Question

On January 1, 2021, Splash City issues $450,000 of 7% bonds, due in 10 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 $419,423. Exercise 9-8A Part 2 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 intermediate and final answers to the nearest whole dollar.) View transaction list Journal entry worksheet < 1 2 3 Record the bond issue. Note: Enter debits before credits. General Journal Debit Credit Date January 01, 2021 ..... Record entry........ .............Clear entry....... .....View.general.ournal....

3 journal entries to record.

1. Record the bond issue

2. Record the first semiannual interest payment

3. Record the second semiannual interest payment

Answer 1

Amortization Sechedule Interest Change in the Cash Paid Expense Carrying value Carrying Value Date 419423 Jan-21 June 30,2021 December 31,2021 15750 15750 16777 16818 1027 1068 420450 421518

Issue Entry 1. Record the Bond Issue Date General Journal Debit Credit Jan 1,2021 Cash 419423 Discount on Bonds Payable 30577 Bonds Payable 450000 Record the issue of the Bond with Discount Journal entris for interest Payment Record the interest payment and amotization Date General Journal Debit Credit June 30 2021 Interest Expenses 16777 Discount on Bonds Payable Cash 15750 Record the interest Expense and amortization of Discount 3. Record theinterest and amotization Date General Journal Debit Credit December 31,2021 Interest Expenses 16818 Discount on Bonds Payable 1068 Cash 15750 Record the interest Expense and amortization of Discount 1027