Accounting for bonds (Learning Objective 5) 15–20 min.

Allied, Corp., issued 8%, five-year bonds payable with a maturity value of $50,000 at a price of $52,420 on January 1, 2014. Journalize the following transactions for Allied, Corp. Include an explanation for each entry.

a. Issuance of the bond payable on January 1, 2014.

b. Payment of semiannual interest and amortization of bond premium on July 1, 2014.

Use the straight-line method to amortize the premium.

AppendixLO1