Question
Celine Dion Company issued $1,152,000of9%, 20-year bonds on January 1, 2014, at102. Interest is payable semiannually on July 1 and January 1. Dion Company uses
Celine Dion Company issued $1,152,000of9%, 20-year bonds on January 1, 2014, at102. Interest is payable semiannually on July 1 and January 1. Dion Company uses the straight-line method of amortization for bond premium or discount.
I am asked to provide the following:
1. Record the issuance of the bond.
I completed this as seen below:
$1,152,000* 1.02 = $1,175,040
Dr. Cash $1,175,040
Cr. Premium on Bonds Payable $23,040
Cr. Bonds Payable $1,152,000
2. Record the payment of interest and the related amortization on July 1, 2014
I got this far but am not sure how to complete.
Dr. Interest Expense ????
Cr. Premium on Bonds Payable ????
Cr. Cash ????
3. Record the accrual of interest and the related amortization on December 31, 2014
I'm not sure.
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