Question

Exercise 10-6 Straight-Line: Recording bond issuance and discount amortization LO P2 Dobbs Company issues 9%, two-year bonds, on December 31, 2019, with a par value of $109,000 and semiannual interest payments. Semiannual Period-End (0) 12/31/2019 (1) 6/30/2020 (2) 12/31/2020 (3) 6/30/2021 (4) 12/31/2021 Unamortized Discount $6,180 4,635 3,090 1,545 Carrying Value $102,820 104,365 105,918 107,455 199,000 Use the above straight-line bond amortization table and prepare journal entries for the following. Required: (a) The issuance of bonds on December 31, 2019. (b) The first through fourth interest payments on each June 30 and December 31. (c) Record the maturity of the bonds on December 31, 2021. Complete this question by entering your answers in the tabs below. Required A Required B Required C The issuance of bonds on December 31, 2019. View transaction list Journal entry worksheet Record the issue of bonds with a par value of $109,000 cash on December 31, 2019 Note: Enter debits before credits. Date General Journal Debit Credit Dec 31, 2019

Answer 1

Required a) Date Dec 31 2019 credit General journal Cash Discount on bonds payable (109000-102820) Bonds payable (To record bond issue) debit 102,820 6,180 $ 109,000 Required b) Date June 30 2020 credit debit 6,450 $ General journal Interest expense (4905+1545) Discount on bonds payable ((6180/4) Cash ( 109000*9%*6/12) (To record interest) 1,545 4,905 Dec 31 2020 6,450 Interest expense (4905+1545) Discount on bonds payable ((6180/4) Cash ( 109000*9%*6/12) (To record interest) 1,545 4,905 $ $ 6,450 Interest expense (4905+1545) Discount on bonds payable ((6180/4) Cash ( 109000*9%*6/12) (To record interest) 1,545 4,905 Dec 31 2021 6,450 Interest expense (4905+1545) Discount on bonds payable ((6180/4) Cash ( 109000*9%*6/12) (To record interest) 1,545 4,905

Required) Date Dec 31 2021 credit debit 109,000 $ General journal Bonds payable Cash (To record interest) $ 109,000 Please comment if you have any doubt Please give thumps up if you satisfied with the answer