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On June 30, 2017, Bramble Company issued $5,300,000 face value of 13%, 20-year bonds at $5,698,716, a yield of 12%. Bramble uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31 Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g 38,548. If no entry is required, select No Entry for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (1) The issuance of the bonds on June 30, 2017 (2) The payment of interest and the amortization of the premium on December 31, 2017. (3) The payment of interest and the amortization of the premium on June 30, 2018 (4) The payment of interest and the amortization of the premium on December 31, 2018 Credit Account Titles and Explanation Bonds Payable Premium on Bonds Payable No. Date Debit (1) June 30, 2017 (2) December 31, 2017
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1 The Issuance of Bond Cash A/c Dr Bonds Payable Premium on bonds Payable 5,698,716 5,300,000 398,716 2 The Payment of Interest and the ammortization of the premium on dec 31,2017 Interest at Face value Interest at current value Face Vale X Coupon interest rate X6/12 Current Value X Yield rate X 6/12 5,300,000* 13%*6/12 344,500 5598, 716* 12%*6/12 341,923 Interest at Face value Interest at current value Interest Expense Dr Premium on Bonds Payable 341,923 2,577 To Cash 344,500 3 The Payment of Interest and the ammortization of the premium on June 30,2018 Interest at Face value Interest at current value Face Vale X Coupon interest rate X 6/12 Current Value X Yield rate X 6/12 Interest at Face value 5,300,000* 13%*6/12 344,500 5,696,139 Current Value (5698716-2577) 5696139*12%*6/12 341,768 Interest at current value Interest Expense Dr Premium on Bonds Payable 341768 2,732 To Cash 344,500 4 The Payment of Interest and the ammortization of the premium on dec 31,2018 Interest at Face value Interest at current value Face Vale X Coupon interest rate X 6/12 Current Value X Yield rate X 6/12 Interest at Face value 5,300,000*13%*6/12 344,500 5,693,407 5693407*12%*6/12 Current Value (5696139-2732) Interest at current value 341,604 Interest Expense Dr Premium on Bonds Payable 341,604 2,896 To Cash 344,500

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