Question

^{9 on 1/1/X1 Your Co. issued $150000 of 10 year 10% bonds at 105. Interest payments are due 6/30 & 12/31 of each year and Your Co. uses the straight-line amortization method. General Journal Date Account/Explanation PR Debit Credit 1/1/20X1 (Issued bonds) 6/30/20X1 (1st payment) 12/31/20X1 (2nd payment) ✓ 1/1/20Y1 (Maturity of Bonds)}

Answer 1

Credit Date 1/1/20X1 Debit 1,57,500 General Journal Accounts/ Explanation Cash Premium on Bond Payable (1500 x 5) Bond Payable (1500 x 100) (To record issue of bond at premium) 7,500 1,50,000 7,500 6/30/20x1 Bond Interest expense ($150,000 x 10% x 6/1 Cash (To record bond interest expense) 7,500 7,500 12/31/20X1 Bond Interest expense ($150,000 x 10% x 6/1 Cash (To record bond interest expense) 7,500 1/1/20Y1 1,50,000 Bond Payable Cash (To record repayment of bond at maturity) 1,50,000