Question

9) Darla's Cookie Emporium borrowed money by issuing $200,000 of bonds for $192,000 on January 1, 2019. The bonds pay interest on January 1 and July 1. The stated rate of interest is 5% and the bonds mature in 10 years. Any discount or premium is amortized using the straight-line method. (2 pts) Required: Prepare journal entries on the following dates: 1. January 1, 2019. 2. July 1, 2019. 3. January 1, 2029. Omit explanations. Date Account Debit Credit

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Answer 1

Solution:-

S.NO	Date	Particulars	Debit ($)	Credit ($)
1	01-Jan-19	Cash	1,92,000.00
		Discount ON Bonds Payable	8,000.00
		Bonds Payable		2,00,000.00
		(To Record Bonds Issued)
2	01-Jul-19	Interest Expenses	5,400.00
		Discount on Bonds Payable (8000/20)		400.00
		Cash ( 200000*5%/2)		5,000.00
3	01-Jan-29	Bonds Payable	2,00,000.00
		Cash		2,00,000.00

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