Question

Required information Exercise 9-14A Record bonds issued at a discount and related annual interest (LO9-5) (The following information applies to the questions displayed below.) On January 1, 2021, White Water issues $410,000 of 7% bonds, due in 10 years, with interest payable annually on December 31 each year. Assuming the market interest rate on the issue date is 8%, the bonds will issue at $382,487. Exercise 9-14A Part 2 2. Record the bond issue on January 1, 2021, and the first two interest payments on December 31, 2021, and December 31, 2022. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your final answers to the nearest whole dollar.) Answer is not complete. No Credit Debit 382,487 1 Date General Journal January 01, 2021 Cash Discount on Bonds Payable Bonds Payable ✓ 2 December 31, 202 Interest Expense 30,598 28,700 Cash Discount on Bonds Payable 3 32,894 December 31, 202 Interest Expense Cash Discount on Bonds Payable 28,700

On January 1, 2021, White Water issues $480,000 of 6% bonds, due in 20 years, with interest payable annually on December 31 each year.

Assuming the market interest rate on the issue date is 5%, the bonds will issue at $539,819.

Answer 1

Journal entries

No	Date	General Journal	Debit	Credit
1	Jan 01	Cash	382487
		Discount on bonds payable		27513
		Bonds payable		410000
2	December 31	Interest expense	30598
		Cash		28700
		Discount on bonds payable		1898
3	Dec 31	Interest expense (382487+1898)*8%	30751
		Cash		28700
		Discount on bonds payable		2051