Question

Exercise 14.4 Straight-Line: Recording b。nd issuance and discount amortization LO P1, P2 Paulson Company issues 896, four-year bonds, on December 31, 2015, with $103,000 and semiannual interest payments. e of Semiannual Period- Unamortized Carrying Value $96,207 97,056 97,905 End Discount $ 6,793 (0) 12/31/2015 (1) 6/30/2016 (2) 12/31/2016 5,944 5,095 Use the above straight-line bond amortization table and prepare journal entries for the following (a) The issuance of bonds on December 31, 2015 (b) The first interest payment on June 30, 2016 (c) The second interest payment on December 31, 2016 View transaction list Journal entry worksheet 2 3 Record the issue of bonds with a par value of $103,000 cash December 31, 2015 Note: Enter debits before credits Date General Journal Debit Credit Cash 96,207 6,793 Dec. 31, 2015 count on bonds payable Bonds payable 103,000 Record entry Clear entry View general journal

Answer 1

Solution:

Journal entries

Date	Particulars	Debit($)	Credit($)
2015, Dec 31	Cash A/c Dr	$96,207
	Discount on bonds payable A/c Dr	$6,793
	To Payable bonds A/c		$103,000
2016, Jun 30	Expenses for interest A/c Dr	$4,969
	To Cash A/c		$4,120
	To Discount on bonds payable A/c		$849	(97,056 - 96,207)
2016, Dec 31	Expenses for interest A/c Dr	$4,969
	To Cash A/c		$4,120
	To Discount on bonds payable A/c		$849	(97,905 - 97,056)