Question

Mellilo Corporation issued $6,000,000 of 20-year, 9.5 percent bonds on July 1, 2013, at 98. Interest is due on June 30 and December 31 of each year, and all of the bonds in the issue mature on June 30, 2033. Mellilo's financial year ends on December 31. Prepare the following journal entries:

  

a.	Prepare the journal entry at July 1, 2013, to record the issuance of the bonds. (Omit the "$" sign in your response.)

  

Date	General Journal		Debit	Credit
July 1, 2013	(Click to select)Discount on bonds payable Accounts payableAccounts receivableBond interest payableBonds payable CashSalesBond interest expense
	(Click to select)Bond interest payableSalesDiscount on bonds payable CashAccounts payableBonds payable Accounts receivableBond interest expense
	(Click to select)Bond interest payableAccounts payableDiscount on bonds payableBond interest expenseAccounts receivableSalesBonds payableCash

  

b.	Prepare the journal entry at December 31, 2013, to pay interest and amortize the bond discount. (Omit the "$" sign in your response.)

    

Date	General Journal		Debit	credit
Dec. 31, 2013	(Click to select)Discount on bonds payableBond interest payableBonds payableAccounts receivableSalesAccounts payableCashBond interest expense
	(Click to select)Accounts payableAccounts receivableCashBonds payable SalesBond interest expenseBond interest payableDiscount on bonds payable
	(Click to select)Bond interest payableCashSalesBond interest expenseBonds payable Accounts payableAccounts receivableDiscount on bonds payable

  

c.	Prepare the journal entry at June 30, 2033, to pay interest, amortize the bond discount, and retire the bonds at maturity. (Omit the "$" sign in your response.)

  

Date	General Journal		Debit	Credit
June 30, 2033	(Click to select)Accounts payableBonds payableSalesDiscount on bonds payableBond interest expenseAccounts receivableBond interest payableCash
	(Click to select)Bond interest expenseCashBonds payable Discount on bonds payable Accounts payableBond interest payable Accounts receivableSales
	(Click to select)Accounts payableSalesDiscount on bonds payable CashBonds payable Accounts receivableBond interest expenseBond interest payable
June 30, 2033	(Click to select)Accounts receivableCashBond payableDiscount on bonds payableAccounts payableBond interest payableSalesBond interest expense
	(Click to select)Bond payableBond interest expenseAccounts payableAccounts receivableCashDiscount on bonds payableSalesBond interest payable

Answer 1

If you find the answer useful please like my answer Credits Question a Date July 1, 2013 Account title and explanation Cash Discount on issue of bonds 9.5% Bond Payable (To record the issue of 9.5% bond payable at discount) Debit s 5,880,000 120,000 6,000,000 Credits Debit S 288,000 Question b Date Account title and explanation December 31, 2013 Interest Expenses Discount on issue of bonds Cash (To record the interest payment and amortization of discount on bonds) 3,000 285,000 Credits Question c Date June 30, 2033 Debit S 288,000 Account title and explanation Interest Expenses Discount on issue of bonds Cash (To record the interest payment and amortization of discount on bonds) 3,000 285,000 Credit Date June 30, 2033 Debit S 6,000,000 Account title and explanation 9.5% Bond Payable Cash (To record the retirement of 9.5% bond payable at face value) 6,000,000