Question

Blossom Company issued $ 516,000,  7%,  30-year bonds on January 1, 2017, at  103. Interest is payable annually on January 1. Blossom uses straight-line amortization for bond premium or discount.

Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Blossom Company issued $ 516,000, 796, 30-year bonds on January 1, 2017, at 103, Interest is payable annually on January 1. Blossom uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events.(Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) (b) (c) (d) The issuance of the bonds. The accrual of interest and the premium amortization on December 31, 2017. The payment of interest on January 1,2018 The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. No. Date Account Titles and Explanation Debit Credit (a) an. 1,2017 Cash Bonds Payable Premium on Bonds Payable b) Dec. 31,2017 Interest Expense Premium on Bonds Payable Interest Payable (c)Jan. 1,2018 Interest Payable Cash (d) Jan. 1,2047 Bonds Payable Cash

(a)		The issuance of the bonds.
(b)		The accrual of interest and the premium amortization on December 31, 2017.
(c)		The payment of interest on January 1, 2018.
(d)		The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	Jan. 1, 2017	enter an account title to record the issuance of the bonds on January 1, 2017	enter a debit amount	enter a credit amount
		enter an account title to record the issuance of the bonds on January 1, 2017	enter a debit amount	enter a credit amount
		enter an account title to record the issuance of the bonds on January 1, 2017	enter a debit amount	enter a credit amount
(b)	Dec. 31, 2017	enter an account title to record the accrual of interest and the premium amortization on December 31, 2017	enter a debit amount	enter a credit amount
		enter an account title to record the accrual of interest and the premium amortization on December 31, 2017	enter a debit amount	enter a credit amount
		enter an account title to record the accrual of interest and the premium amortization on December 31, 2017	enter a debit amount	enter a credit amount
(c)	Jan. 1, 2018	enter an account title to record the payment of interest on January 1, 2018	enter a debit amount	enter a credit amount
		enter an account title to record the payment of interest on January 1, 2018	enter a debit amount	enter a credit amount
(d)	Jan. 1, 2047	enter an account title to record the redemption of the bonds at maturity on January 1, 2047	enter a debit amount	enter a credit amount
		enter an account title to record the redemption of the bonds at maturity on January 1, 2047	enter a debit amount	enter a credit amount

Answer 1

No.	Date	General journal	debit	credit
(a)	Jan 1, 2017	Cash (516,000*103 %)	531480
		Bonds payable		516000
		Premium on bonds payable (531480-516000)		15480
(b)	Dec. 31, 2017	Interest expense (36120-516)	35604
		Premium on bonds payable (15480/30)	516
		Interest payable (516000*7%)		36120
(c)	Jan. 1, 2018	Interest payable	36120
		Cash		36120
(d)	Jan 1, 2047	Bonds payable	516000
		Cash		516000