Question
Flint Company issued $624,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and January 1. Flint
Flint Company issued $624,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and January 1. Flint Company uses the straight-line method of amortization for bond premium or discount. Prepare the journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest and the related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020.
Date Account Titles and Explanation Debit Credit 1/1/20 Cash 636,480 Bonds Payable 624,000 Premium on Bonds Payable 12,480 7/1/20 Interest Expense Premium on Bonds Payable Cash 12/31/20 Interest Expense Premium on Bonds Payable Cash Activate WindoStep by Step Solution
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