Question

Exercise 15-6 Whitmore Company issued $500,000 of 5-year, 5% bonds at 95 on January 1, 2017. The bonds pay Interest annually Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically Indented when amount is entered. Do not Indent manually.) Account Titles and Explanation Debit 475000 Discount on Bonds Payable 25000 Bonds Payable 500000 SHOW LIST OF ACCOUNTS Compute the total cost of borrowing for these bonds. Total cost of borrowing 150000 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the issuance of the bonds, assuming the bonds were issued at 101. (Credit account titres are automatically indented when amount is ente indent manually.) Art acy Policy Titec and Finlanatin nakit . 2000-2019 Yohn Wiley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc.

Answer 1

fale value Inlirist Yato at $500000 51. Ksuld Boads dm sue are8500000 X U7S000 Cash Discrunt oBmds bands payable $ 25000 .500000 pay able Total cost of bemasoing a bomol is Total Cash Peteip ५न000 Loy Jaterest pay me ats S00000x 5-6x5) prinupal (125000) Ca50000) Cost of banuoing 150000 b) 3sue of Bonos at Prenium will be 101 Cash lBank Premiun m bmds pajabls Ponds OS000 $5000 Pay abla

borrowing Cost of cash Reapk 505000 (1aso00) 500000) Tnsterest paymants Pinsipa! paymeat $12000 0