Question

Issuing Bond At Premium (Show all calculation) Please complete journal entry and T-account

Ex 5: Issuing Bond At Premium Dec 31, 2011. a company issued the following bond Face Value $7.000 stated interest rate market rate 6% Issue Price 100 of para resposomically on 630 and 1231. Maturity at Dec 31, 2013 year bond Semiannual Payment Principle X Interest Rate x Paris Month Cash a. b) Principale Total Paid interest expert To Account Title Debit Credi

Answer 1

Please find the answer below:

Date	Account name	Debit	Credit
31-12-2011	Cash	7260		=7000*103.71%
	Bond Payable		7000
	Premium on Bond Payable		260
30-06-2012	Interst expense	280		=7000*8%*6/12
	Premium on Bond Payable	65		=260/4
	Cash		345
31-12-2012	Interst expense	280
	Premium on Bond Payable	65
	Cash		345
30-06-2013	Interst expense	280
	Premium on Bond Payable	65
	Cash		345
31-12-2013	Interst expense	280
	Premium on Bond Payable	65
	Bond Payable	7000
	Cash		7345

Cash
Date	Particulars	Amount	Date	Particulars	Amount
31-12-2011	Bond Payable	7,000	30-06-2012	Interst expense	280
31-12-2011	Premium on Bond Payable	260	30-06-2012	Premium on Bond Payable	65
			31-12-2012	Interst expense	280
			31-12-2012	Premium on Bond Payable	65
			30-06-2013	Interst expense	280
			30-06-2013	Premium on Bond Payable	65
			31-12-2013	Interst expense	280
			31-12-2013	Premium on Bond Payable	65
31-12-2011	Balance	1,120	31-12-2013	Bond Payable	7,000
	Total	8,380		Total	8,380
Bond Payable
Date	Particulars	Amount	Date	Particulars	Amount
31-12-2013	Cash	7,000	31-12-2011	Cash	7,000
	Total	7,000		Total	7,000
Premium on Bond Payable
Date	Particulars	Amount	Date	Particulars	Amount
30-06-2012	Cash	65	31-12-2011	Cash	260
31-12-2012	Cash	65
30-06-2013	Cash	65
31-12-2013	Cash	65
	Total	260		Total	260
Interest expense
Date	Particulars	Amount	Date	Particulars	Amount
30-06-2012	Interst expense	280
31-12-2012	Interst expense	280
30-06-2013	Interst expense	280
31-12-2013	Interst expense	280	31-12-2013	Balance	1,120
	Total	1,120		Total	1,120