Question

Un (Body) Question #3 (25 marlo) On January 1, 2019, Company C. issued five year bonds with a face value of $500,000 and coupon interest rate of 6%, with interest payable semi-annually 1. Prepare a partial bond amortization table for the first two interest payments waning that interest is paid on July 1 and January 1 and that the bonde sold based on the following scenario. 2. Record the journal entries relating to the boods on January 1, July 1, and December 31 Market Rate 7% (Received $479,209 for the bond) Student's response to Q3 (only answers provided in box below will be marked) Semi Interest Interest to be Discount Unamortized annual Expense paid Amortization Discount Interest Periods Bond Carrying Amount Jan 17 2018 Jul 1, 2018 mglish (U.S.) 100 DLL

Answer 1

1) Partial bond amortization table

Semi annual interest periods	Interest Expense	Interest to be paid	Discount Amortization	Unamortized discount	Bonds carrying amount
January 1,2019				20,791	479,209
July 1,2019	16,772	15,000	1,772	19,019	480,981
January 1,2020	16,834	15,000	1,834	17,185	482,815

2)

Journal Entries

Date	Accounts title and explanation	Debit($)	Credit($)
January 1,2019	Cash	479,209
	Discount on bonds payable	20,791
	Bonds payable		500,000
	[Bonds issued at a discount ]
July 1,2019	Interest Expense	16,772
	Cash		15,000
	Discount on bonds payable		1,772
	[Interest paid and discount on bonds payable amortized ]
January 1,2020	Interest Expense	16,834
	Cash		15,000
	Discount on bonds payable		1,834
	[Interest paid and discount on bonds payable amortized ]

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