Question

Paulson Company issues 7%, four-year bonds, on January 1 of this year, with a par value of $109,000 and semiannual interest payments. (0) (1) (2) Semiannual Period-End January 1, issuance June 30, first payment December 31, second payment Unamortized Discount $6,913 6,049 5,185 Carrying Value $102,087 102,951 103,815 Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on January 1. (b) The first interest payment on June 30. (c) The second interest payment on December 31. View transaction list Journal entry worksheet 1 2 3 Record the issue of bonds with a par value of $109,000 cash January 1. Note: Enter debits before credits. General Journal Debit Credit Date January 01 Record entry Clear entry View general journal

Answer 1

Answer

Date	Accounts title	Debit	Credit
01-Jan	Cash	$102,087
	Discount on Bonds Payable	$6,913
	Bonds Payable		$109,000
	(to record issuance)
30-Jun	Interest Expense	$4,679
	Discount on Bonds Payable ($6913 - 6049)		$864
	Cash ($109000 x 7% x 6/12)		$3,815
	(to record #1 interest)
31-Dec	Interest Expense	$4,679
	Discount on Bonds Payable ($6049-5185)		$864
	Cash ($109000 x 7% x 6/12)		$3,815
	(to record #2 interest)