Bonds Issued at a Discount

Brenner's Home Club issued the following bonds at a discount:

Date of issue and sale:	April 1, 20-1
Principal amount:	$500,000
Sale price of bonds:	98
Denomination of bonds:	$1,000
Life of bonds:	10 years
Stated rate:	7%, payable semiannually on September 30 and March 31

1. Prepare journal entries for:

a. Issuance of the bonds at a discount.

b. Interest payment and discount amortization on the bonds on September 30.

c. Year-end adjustment on the bonds.

If an amount box does not require an entry, leave it blank.

1. Prepare journal entries for:

a. Issuance of the bonds at a discount.

b. Interest payment and discount amortization on the bonds on September 30.

c. Year-end adjustment on the bonds.

If an amount box does not require an entry, leave it blank.

Page: 1

ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	a. 20-1 Apr. 1	Bond Interest ExpenseBond Interest PayableBonds PayableCashCash	blank	blank	Cash	Cash	1
2	blank	Bond Interest PayableBond Interest ReceivableBonds PayableDiscount on Bonds PayableDiscount on Bonds Payable	blank	blank	Discount on Bonds Payable	Discount on Bonds Payable	2
3	blank	Bond Interest PayableBonds PayableCashDiscount on Bonds PayableBonds Payable	blank	blank	Bonds Payable	Bonds Payable	3
4	blank	blank	blank	blank	blank	blank	4
5	b. Sept. 30	Bond Interest ExpenseBond Interest ReceivableCashDiscount on Bonds PayableBond Interest Expense	blank	blank	Bond Interest Expense	Bond Interest Expense	5
6	blank	Bond Interest ExpenseBond Interest PayableBonds PayableDiscount on Bonds PayableDiscount on Bonds Payable	blank	blank	Discount on Bonds Payable	Discount on Bonds Payable	6
7	blank	Bond Interest PayableBond Interest ReceivableBonds PayableCashCash	blank	blank	Cash	Cash	7
8	blank	blank	blank	blank	blank	blank	8
9	c. Dec. 31	Bond Interest ExpenseBond Interest PayableCashDiscount on Bonds PayableBond Interest Expense	blank	blank	Bond Interest Expense	Bond Interest Expense	9
10	blank	Bond Interest ExpenseBond Interest ReceivableBonds PayableDiscount on Bonds PayableDiscount on Bonds Payable	blank	blank	Discount on Bonds Payable	Discount on Bonds Payable	10
11	blank	Bond Interest PayableBond Interest ReceivableBonds PayableCashBond Interest Payable	blank	blank	Bond Interest Payable	Bond Interest Payable	11