E10-23 (Algo) (Chapter Supplement) Recording and Reporting a Bond Issued at a Premium (Straight-Line Amortization without a Premium Account) LO 10-5

On January 1 of this year, Victor Corporation sold bonds with a face value of $1,420,000 and a coupon rate of 8 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and does not use a premium account. Assume an annual market rate of interest of 6 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answers to whole dollars.)

Required:

1.& 2. Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year.

3. What bonds payable amount will Victor report on its June 30 balance sheet?

Prepare the journal entry to record the issuance of the bonds and the interest payment on June 30 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record the issuance of the bonds.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
January 01

• Record the interest payment on June 30, using straight-line amortization.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
June 30