Question

10-10A

I am not sure what I am doing wrong... I tried 98400 for A and 49200 for B along with the answers shown.

Problem 10-10A Sunland Company sold $2,460,000, 5%, 10-year bonds on January 1, 2019. The bonds were dated January 1, 2019, and pay interest annually on January 1. Sunland Company uses the straight-line method to amortize bond premium or discount. Your answer is correct. Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2019, assuming that the bonds are sold at 104. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Jan. 1, 2019 Cash | Premium on Bonds Payable 98400 P0P0P020 Bonds Payable 2460000 Dec. 31, 2019 interest Expense Premium on Bonds Payable 9840 Interest Payable 123000

Answer 1

Answer

• Issue with Bonds Issued on Premium.
  >Unamortised amount of Premium on 31 Dec 2019
  = $ 98400 – 9840
  = $ 88,560

>Hence, in the Balance Sheet portion, enter Unamortised balance in the “Premium on Bonds Payable” be $ 88,560 (in place of incorrect $ 9840).

• Issue with Bonds issued on Discount on premium.
  >Unamortised amount of Discount on 31 Dec 2019
  = $ 49200 - 4920
  = $ 44,280

>Hence, in the Balance Sheet portion, enter Unamortised balance in the “Discount on Bonds Payable” be $ 44,280 (in place of incorrect $ 4920).