Question

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The Gorman Group issued $910,000 of 13% bonds on June 30, 2018, for $978.459. The bonds were dated on June 30 and mature on June 30, 2038 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually on December 31 and June 30. points Skipped Required: Complete the below table to record the company's journal entry. 1. to 3. Prepare the journal entry to record their issuance by The Gorman Group on June 30, 2018, interest on December 31, 2018 and interest on June 30, 2019 (at the effective rate). eBook Complete this question by entering your answers in the tabs below. Print References Calculation Req 1 to 3 Complete the below table to record the company's journal entry. (Round intermediate calculations and final answers to the nearest whole dollar. Enter interest rate to 1 decimal place. (i.e. 0.123 should be entered as 12.3).) December 31, 2018 Amount Interest Rate Total Interest expense Cash Amortization of premium on bonds $ 0 June 30, 2019 Amount Interest Rate Total

Answer 1

| Answers Interest Rate I Total x 6. $58,708 X 6.5%, $ 59,150 $ 442 31-Dec-2018) Amount Interest $978,459 expense | Cash $ 910,000 Amortization of premium on bonds 30-Jun-19 Amount Interest $978917 expense (978,459- 442) Cash $ 910,000 Amortization of premium on bonds Interest Rate Total $58,681 x 67. = X 6.5%. 1 = $59,150 $ 469 Date 1. June 30 2018 credit Particulars Debit Cash Ale or $978,459 To Bonds payable qe To premium on bonds Payable Interest Expense nic do $ 58,708 Premium on bonds payable $ 442 $910,000 $68,459 2. Rec-31 2018 To cash $ 59,150 'Jun-30 2019 $58,68| Interest Expense Alc or Premium on bonds - payable To cash $469. $59,150