Question

G how to ml Link-r... Southern Required information [The following information applies to the questions displayed below) Legacy issues S720.000 of 6.5%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $683,649 and their market rate is 8% at the issue date. 4. Prepare the journal entries to record the first two interest payments Journal entry worksheet the interest payment and amortization on June 30, 2017. Debit Credit Date

Answer 1

Solution:

1.

Date	Account Title	Debit	Credit
June 30,2017	Interest expense ($683,649*8%*1/2)	$27,346
	Discount on bonds payable ($27,346 -23,400)		$3,946
	Cash ($720,000*0.065*1/2 )		$23,400
	(To record interest and amortization )

2.

Date Account Title DebitCredit June 30,2017 Interest expense ($683,649+3.946)*800*1/2) $27,504 Discount on bonds payable ($27,346-23,400) Cash ($720,000 0.065*1/2) (To record interest and amortization) $4,104 $23,400