Bramble Corporation sold $2,200,000, 7%, 5-year bonds on January 1, 2022. The bonds were dated January...

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Bramble Corporation sold $2,200,000, 7%, 5-year bonds on January 1, 2022. The bonds were dated January...

Bramble Corporation sold $2,200,000, 7%, 5-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on January 1. Bramble Corporation uses the straight-line method to amortize bond premium or discount.

Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2022, assuming that the bonds sold at 105

Jan 1.

Dec 31.

business accounting

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Answer 1

Answer #1

		Debit	Credit
Jan 1	Cash	2310000		=2200000*1.05
	Bonds payable		2200000
	Premium on Bonds payable		110000

Dec 31	Interest expense	132000
	Premium on Bonds payable	22000		=110000/5
	Interest payable		154000	=2200000*7%

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Answer 2

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