Question

[The following information applies to the questions displayed below] On January 1, 2021, White Water issues $460,000 of 5 % bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year Assuming the market interest rate on the issue date is 6 %, the bonds willl issue at $414,920. Exercise 9-11A 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. Roundi your final answers to the nearest whole dollar.) View transaction list Journal entry worksheet < 3 1 2 Record the bond issue. Note: Enter debits before credits. Debit Credit General Journal Date January 01, 2021 View general journal Clear entry Record entry of 8 Nex < Prex

Answer 1

Interest payable semi annually = $460,000 * 2.5% = $11,500

Interest expense on June 30 = $414,920 * 3% = $12,448

Interest amortized on Jun 30 = $12,448 - $11,500 = $948

Carrying value on June 30 = $414,920 + $948 = $415,868

Interest expense on December 31 = $415,868 * 3% = $12,476

Interest amortized on December 31 = $12,476 - $11,500 = $976

Date	General Journal	Debit	Credit
June 30, 2021	Interest expense	$12,448
	Bond discount		$948
	Cash		$11,500
December 31	Interest expense	$12,476
	Bond discount		$976
	Cash		$11,500