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The Gorman Group issued $870,000 of 11% bonds on June 30, 2018, for $944,646. The bonds were dated on June 30 and mature on. June 30, 2038 (20 years). The market yield for bonds of similar risk and maturity is 10%. Interest is paid semiannually on December 31 and June 30. Required Complete the below table to recotd the companys journal entry. 1. to 3. Prepare the journal entry to record their issuance by The Gorman Group on June 30, 2018, interest on December 31, 2018 and interest on June 30, 2019 (at the effective rate). Complete this question by entering your answers in the tabs below Calculation Req 1 to3 Complete the below table to record the companys journal entry. (Round intermediate calculations and final answers to the nearest whole dollar. Enter interest rate to 1 decimal place. (i.e. 0.123 should be entered as 12.3).) cember 31, 2018 Interest expense Cash Amount Interest Rate Amortization of premium on bonds Amount Interest Rate ne 30, 2019 Interest expense Cash Amortization of premium on bonds Calculation Req 1 to 3 >
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Solution: Dec.31,2018 Interest Expense Cash Amount 944646 x 870000x Interest Rate 5.0% 5.5% Total $47,232 $47,850 Amortization of Premium on bonds S 618 Jun.30,2018 Interest Expense Cash Amount 944028X 870000 x Interest Rate 5.0% 5.5% Total $47,201 $47,850 Amortization of Premium on bonds $ 649 Naming convention is not available, can be slightly different ournal Entries Date Account title and explaination Debit Credit 1) Jun.30 Cash 944646 Bonds payable Premium on Bonds payable To record the issuance of bonds) 2018 870000 74646 2) Dec.31 Interest Expense (944646*596) 47232 618 Premium on Bonds payable Cash To record the interest on Dec.31, 2018) 2018 47850 47201 649 3) Jun.30 Interest Expense (944646-618) *5% Premium on Bonds payable Cash To record the interest on June.30, 2018) 2019 47850

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