Question

Dobbs Company issues 5%, two-year bonds, on December 31, 2017, with a par value of $100,000 and semiannual interest payments.

Semiannual Period-End			Unamortized Discount			Carrying Value
(0)	12/31/2017		$	6,000		$	94,000
(1)	6/30/2018			4,500			95,500
(2)	12/31/2018			3,000			97,000
(3)	6/30/2019			1,500			98,500
(4)	12/31/2019			0			100,000

Use the above straight-line bond amortization table and prepare journal entries for the following.

(b) The first through fourth interest payments on each June 30 and December 31. (c) Record the maturity of the bonds on December 31, 2019.

Answer 1

b
June 30,2018	Bonds interest expense	4000
	Discount on Bonds payable		1500
	Cash		2500	=100000*5%/2
Dec 31,2018	Bonds interest expense	4000
	Discount on Bonds payable		1500
	Cash		2500
June 30,2019	Bonds interest expense	4000
	Discount on Bonds payable		1500
	Cash		2500
Dec 31,2019	Bonds interest expense	4000
	Discount on Bonds payable		1500
	Cash		2500
c
Dec 31,2019	Bonds payable	100000
	Cash		100000