Question
1.) Discount Amortization On the first day of the fiscal year, a company issues a $4,300,000, 10%, 9-year bond that pays semiannual interest of $215,000
1.) Discount Amortization On the first day of the fiscal year, a company issues a $4,300,000, 10%, 9-year bond that pays semiannual interest of $215,000 ($4,300,000 10% ), receiving cash of $3,834,412. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.
2.) A $1,950,000 bond issue on which there is an unamortized premium of $70,500 is redeemed for $1,991,600.
Journalize the redemption of the bonds. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTSGeneral Ledger
ASSETS | |
110 | Cash |
111 | Petty Cash |
121 | Accounts Receivable |
122 | Allowance for Doubtful Accounts |
126 | Interest Receivable |
127 | Notes Receivable |
131 | Merchandise Inventory |
141 | Office Supplies |
191 | Land |
194 | Office Equipment |
195 | Accumulated Depreciation-Office Equipment |
LIABILITIES | |
210 | Accounts Payable |
221 | Salaries Payable |
231 | Sales Tax Payable |
232 | Interest Payable |
241 | Notes Payable |
251 | Bonds Payable |
252 | Discount on Bonds Payable |
253 | Premium on Bonds Payable |
EQUITY | |
311 | Common Stock |
312 | Paid-In Capital in Excess of Par-Common Stock |
315 | Treasury Stock |
321 | Preferred Stock |
322 | Paid-In Capital in Excess of Par-Preferred Stock |
331 | Paid-In Capital from Sale of Treasury Stock |
340 | Retained Earnings |
351 | Cash Dividends |
352 | Stock Dividends |
390 | Income Summary |
REVENUE | |
410 | Sales |
610 | Interest Revenue |
611 | Gain on Redemption of Bonds |
EXPENSES | |
510 | Cost of Merchandise Sold |
515 | Credit Card Expense |
516 | Cash Short and Over |
522 | Office Salaries Expense |
531 | Advertising Expense |
532 | Delivery Expense |
533 | Repairs Expense |
535 | Rent Expense |
536 | Insurance Expense |
537 | Office Supplies Expense |
541 | Bad Debt Expense |
562 | Depreciation Expense-Office Equipment |
590 | Miscellaneous Expense |
710 | Interest Expense |
711 | Loss on Redemption of Bonds |
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