Question

- Your answer is partially correct. Blossom Company issued $294,000,7%, 15-year bonds on December 31, 2021, for $282,240. Interest is payable annually on December 31. Blossom uses the straight-line method to amortize 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) The issuance of the bonds. (b) The payment of interest and the discount amortization on December 31, 2022. (c) 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) Dec 31, 2021 : Cash 282240 Discount on Bonds Payable 11760 Bonds Payable 294000 (b) Dec 31, 2022 | Interest Expense 254760 Discount on Bonds Payable 18660 Cash 273420 le) Dec 31, 2036 # Bonds Payable 294,000 Cash 294,000

Answer 1

Journal entry

Date	account and explanation	Debit	credit
Jan 1	Cash	282240
	Discount on bonds payable	11760
	Bonds payable		294000
Dec 31	Interest expense	21364
	Discount on bonds payable (11760/15)		784
	Cash (294000*7%)		20580
Dec 31,2036	Bonds payable	294000
	Cash		294000