Question

LTE Question 7 View Policies Current Attempt in Progress Blossom Company issued $327.000,8%, 15-year bonds on December 31, 2021, for $313.920. Interest is payable annually on December 31 Blossom uses the straight line method to amortize bond premium or discount Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. The payment of interest and the discount amortization on December 31, 2022. Id The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded No Date Account Titles and Explanation Credit e Textbook and Media E R T Y U : 1 : 0 [ P ] [ ] DE F G HLJKO

Answer 1

Solution:

Journal Entry
Date	Particulars	Debit	Credit
31-Dec-21	Cash A/c Dr	$3,13,920
	Discount on Bond Payable Dr	$13,080
	To bonds payable		$3,27,000
	(Being bond issued at discount)
31-Dec-22	Interest Expense Dr	$27,032
	To Discount on Bond Payable ($13080/15)		$872.0
	To Cash ($327000*8%)		$26,160
31-Dec-36	Bond payable	$3,27,000
	To Cash		$3,27,000