Question

ment CALCLATOR FULL SOREEN PRINTER VERSION BACK NEXT Problem 10-0BA Flounder Corporation sold $2,350,000, 7 % , 5-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on January 1. Flounder Corporation uses the stralght-line method to amortize bond premium or discount. Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2022, assuming that the bonds sold at 104. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Dec. 31

Answer 1

(1)-Journal entry to record the issuance of bond

Date	Accounts Tittles and explanations	Debit ($)	Credit ($)
Jan 01	Cash A/c [$2,350,000 x 104%]	2,444,000
	To Premium on Bonds Payable A/c		2,350,000
	To Bond Payable A/c [$2,444,000 - $2,350,000]		94,000
	[Journal entry to record the issuance of Bond]

(2)-Journal entry to record the Bond interest expense for 2022

Date	Accounts Tittles and explanations	Debit ($)	Credit ($)
Dec 31	Interest Expense A/c [$164,500 - $18,800]	145,700
	Premium on Bonds Payable A/c [$94,000 / 5 Years]	18,800
	To Cash A/c [$2,350,000 x 7.00%]		164,500
	[Journal entry to record the Bond interest expense for 2022]