Question

Review the following three bonds payable assumptions: (Click the icon to view the bond assumptions.) Journalize issuance of the bond and the first semiannual interest payment under each of the three assumptions. The company amortizes bond premium and discount by the effective interest amortization method. Explanations are not required. (Record debits first, then credits. Exclude explanations from any ouma entries Round your final newers to the nearest whole dollar) . The presented Assumption 1. Ten year bonds payable with face value of $84.000 and stated terest rate of 10% paid semiannually. The market rate of interesa 10% the bonds at issuance is $84,000 Joumalize the issuance of the bonds when the market interest rate is 10% Date Accounts Debit Credit Choose from any list of enter any number in the input fields and then click Check Answer

Answer 1

Assumption-1
Accounts	Debit	Credit
Cash	84000
Bonds payable		84000
Accounts	Debit	Credit
Interest expense	4200		=84000*10%/2
Cash		4200
Assumption-2
Accounts	Debit	Credit
Cash	74382
Discount on Bonds payable	9618
Bonds payable		84000
Accounts	Debit	Credit
Interest expense	4463		=74382*12%/2
Discount on Bonds payable		263
Cash		4200	=84000*10%/2
Assumption-3
Accounts	Debit	Credit
Cash	95382
Bonds payable		84000
Premium on Bonds payable		11382
Accounts	Debit	Credit
Interest expense	3815		=95382*8%/2
Premium on Bonds payable	385
Cash		4200	=84000*10%/2