Bonds Issued at a Discount Emerald, Inc., issued the following bonds at a discount: Date of issue and sale: April 1, 20-1 Principal amount: $500,000 Sale price of bonds: 97 Denomination of bonds: $1,000 Life of bonds: Stated rate: 8%, payable semiannually on September 30 and March 31 20 years Required: 1. Prepare journal entries for the activities listed below. If an amount box does not require an entry, leave it blank. If required, round your answers to two deci (a) Issuance of the bonds at a discount. Page: DOC. POST. NO. REF. DEBIT CREDIT 485,000 1 DATE ACCOUNT TITLE 1 20-1 Apr. 1 Cash 2 Discount on Bonds Payable 3 Bonds Payable 15,000 2 500,000 3 (b) Interest payment and discount amortization on the bonds on September 30, 20-1. Page: DATE ACCOUNT TITLE DOC. POST. DEBIT CREDIT NO. REF. 1 20-1 Sept. 30 Bond Interest Expense Discount on Bonds Payable Cash 1 N N 3 20,000 3 DOC. POST. NO. REF. DEBIT (c) Year-end adjustment on the bonds for 20-1. Page: DATE ACCOUNT TITLE 1 20-1 Dec. 31 Bond Interest Expense Discount on Bonds Payable 3 Bond Interest Payable CREDIT 1 2 2 Nm 10,000 3 DATE DOC. POST. NO. REF. DEBIT (d) Reversing entry for the beginning of 20-2. Page: ACCOUNT TITLE 1 20-2 Jan 1 Bond Interest Payable Discount on Bonds Payable Bond Interest Expense CREDIT 10,000 1 2 2 3 3 (e) Interest payments and discount amortization on the bonds for 20-2 (March 31 and September 30). Page: DOC. POST. DATE ACCOUNT TITLE DEBIT CREDIT NO. REF. 1 20-2 Mar. 31 Bond Interest Expense Discount on Bonds Payable Cash 1 2. 2 3 20,000 3 4 4 5 Sept. 30 5 6 6 Bond Interest Expense Discount on Bonds Payable Cash 6 7 20,000 7 2. Calculate the carrying value of the bonds on September 30, 20-2