Question

1.

Check my Brussels Enterprises issues bonds at par dated January 1, 2019, that have a $3,400,000 par value, mature in four years, and pay 9% interest semiannually on June 30 and December 31. 1. Record the entry for the issuance of bonds for cash on January 1. 2 Record the entry for the first semiannual interest payment and the second semiannual interest payment. 3. Record the entry for the maturity of the bonds on December 31, 2022 (assume semiannual interest is already recorded). View transaction list Journal entry worksheet < 1 2 3 4 Record the cash paid for the first semiannual interest payment on June 30. Note: Enter debits before credits General Journal Debit Credit Date June 30

2.

Answer 1

1)

Date	General Journal	Debit	Credit
Jan 1, 2019	Cash	$3400000
	Bonds payable		$3400000
	(To record bonds issued)
June 30, 2019	Bond interest expense ($3400000*9%*6/12)	$153000
	Cash		$153000
	(To record bond interest expense)
December 31, 2019	Bond interest expense ($3400000*9%*6/12)	$153000
	Cash		$153000
	(To record bond interest expense)
December 31, 2022	Bonds payable	$3400000
	Cash		$3400000
	(To record maturity of bonds)

2)

Par (maturity) value		Semiannual Rate		Semiannual Cash Interest Payment
$3400000	*	4.5%	=	$153000

Date	General Journal	Debit	Credit
January 1	Cash	$3400000
	Bonds payable		$3400000
	(To record bonds issued)
June 30	Bond interest expense	$153000
	Cash		$153000
	(To record bond interest expense)
December 31	Bond interest expense	$153000
	Cash		$153000
	(To record bond interest expense)

Date	General Journal	Debit	Credit
January 1	Cash ($3400000/100*98)	$3332000
	Discount on bonds payable (3400000-3332000)	$68000
	Bonds payable		$3400000
	(To record bonds issued at discount)
January 1	Cash ($3400000/100*102)	$3468000
	Bonds payable		$3400000
	Premium on bonds payable (3468000-3400000)		$68000
	(To record bonds issued at premium)