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

Minnie Corporation issued 3%, 20-year bonds payable with a maturity value of

$590,000 on January 31. The bonds were issued at par and pay interest on January 31 and July 31. Record

(a) issuance of the bonds on January 31,

(b) payment of interest on July 31, and

(c) accrual of interest on December 31.

E9-22A. Accounting for bonds (Learning Objective 5) 15–20 min.

On January 1, Penestrie, Corp., issues 6%, 20-year bonds payable with a maturity value of $175,000. The bonds sell at 96 and pay interest on January 1 and July 1. Penestrie, Corp., amortizes any bond discount or premium by the straight-line method.

Requirements 1. Record the issuance of the bonds on January 1.

2. Record the semiannual interest payment and amortization of any bond discount or premium on July 1.

AppendixLO1