Question

The following infarmation applies to the questions displayed below On January 1, 2018, Twister Enterprises, a manufacturer of a variety of transportable spin rides, issues $460,000 of 6 % bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year 1, value Required information 10.00 points Required: 1. If the market interest rate is 6 % , the bonds wil issue at $460,000. Record the bond issue on January 1, 2018, and the first two semiannual interest payments on June 30, 2018, and December 31, 2018. (f no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < Record the bond issue. Note: Enter debits before credts Date General Jourmal Debit Credit January 01, 2018 Cash 460.000 Bonds payabler 460.000 Record entry Clear entry View general journal References eBook & Resources

Answer 1

Answer 1:

Workings (1) General Journal Debit Date Credit $460,000 January. 01, 2018 Cash Bonds payable $460,000 (to record issue of bonds) Credit (2) June.30, 2018 General Journal Debit Date 460000*6% /2 $13,800 Interest expense $13,800 Cash (to record interest payment) Credit (3) General Journal Debit Date 460000 6%/2 December. 31, 2018 Interest expense $13,800 $13,800 Cash (to record interest payment)

Answer 2:

(1) General Journal Debit Credit Workings Date $410,883.00 January. 01, 2018 Cash Discount on Bonds payable $49,117.00 460000 410883 $460,000.00 Bonds payable |(to record issue of bonds with discount) Credit (2) General Journal Debit Date June.30, 2018 $14,380.91 410883 *7%/2 Interest expense Discount on Bonds payable $580.91 -14380.91 - 13800 460000* 6% /2 $13,800 Cash (to record interest expense and discount amortization) (3) General Journal Debit Credit Date December. 31, 2018 Interest expense $14,401.24 410883+580.91)*7%/2 - 14401.24-13800 $601.24 Discount on Bonds payable -460000 6%/2 $13,800.00 Cash (to record interest expense and discount amortization)

Answer 3:

(1) General Journal Debit Credit Workings Date $517,736.00 January. 01, 2018 Cash Premium on Bonds payable $57,736.00 -517736 460000 Bonds payable $460,000.00 (to record issue of bonds at premium of $57537) General Journal (2) Debit Credit Date $12,943.40 517736 5%/2 June.30, 2018 Interest expense Premium on Bonds payable $856.60 -13800 12943.40 $13,800 460000* 6%/2 Cash (to record interest expense and premium amortization) (3) General Journal Debi Credit Date December. 31, 2018 Interest expense $12,921.99 (517736 -856.6) *5%/2 Premium on Bonds payable $878.01 =13800 12921.99 $13,800.00 460000*6%/2 Cash (to record interest expense and premium amortization)