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Bonds Issued at a Discount Brenners Home Club issued the following bonds at a discount: April 1, 20-1 $500,000 Date of issue
1. Prepare journal entries for: Issuance of the bonds at a discount. b. Interest payment and discount amortization on the bon
1. Prepare journal entries for: a. Issuance of the bonds at a discount. b. Interest payment and discount amortization on the
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Answer #1

Part 1

No.

Date

Account titles and explanation

Debit

Credit

a

April 1

Cash (500000*98%)

490000

Discount on bonds payable (500000*2%)

10000

Bonds payable

500000

b

September 30

Interest expense

18000

Discount on bonds payable (10000/20)

500

Cash (500000*7%/2)

17500

c

December 31

Interest expense

9000

Discount on bonds payable (10000/20*3/6)

250

Interest payable (500000*7%/2*3/6)

8750
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