Question

Problem 9-94A (Algorithmic) Note Computations and Entries Straight Line) On January 1, 2020, Sisek Company borrowed $886,000 with a 10-year, 9.75% note, interest payable semiannually on June 30 and December 31. Cash in the amount of $878,800 was received when the note was issued. Required: 1. Prepare the necessary journal entry at January 1, 2020. 2020 Jan. 1 Cash 878,800 Discount on Notes Payable 7,200 Notes Payable 886,000 Record issuance of notes at discount Feedback 2. Prepare the necessary journal entry at June 30, 2020. If required, round amounts to the nearest dollar. 2020 June 30 Interest Expense Cash Discount on Notes Payable Record interest expense 3. Prepare the necessary journal entry at December 31, 2020. If required, round amounts to the nearest dollar. 2020 December 31 Interest Expense Cash Discount on Notes Payable Record interest expense

Answer 1

Date	Accounts and explanation	Debit(in $)	Credit(in $)
30-Jun-20	Interest Expenses	43,553
	Discounts on Bond payable		360
	Cash		43,193
31-Dec-20	Interest Expenses	43,553
	Discounts on Bond payable		360
	Cash		43,193
Discount amortized for 5 years(10 payments) =$360*10 =$3,600
So Carrying amount as on December 31,2024 =$878,800 + $3,600 =$882,400