Question

Exercise 15-16 a-c Carla Vista Company issued $790,000, 9%, 10-year bonds on December 31, 2019, for $720,000. Interest is payable annually on December 31. Carla Vista Company uses the straight-line method to amortize bond premium or discount. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2019 SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the journal entry to record the payment of interest and the discount amortization on December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 SHOW LIST OF ACCOUNTS LINK TO TEXT

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Dec. 31, 2019	Cash	$720,000
	Discount on Bonds Payable	$70,000
	Bonds Payable		$790,000
Dec. 31, 2020	Interest expense	$78,100
	Discount on Bonds Payable ($70,000 / 10 years)		$7,000
	Cash ($790,000*9%*1)		$71,100
Dec. 31, 2029	Bonds Payable	$790,000
	Cash		$790,000