Interest Payments and Interest Expense for Bonds (Straight Line)

On January 1, 2020, Harrington Corporation sold $104,000 of 15-year, 11% bonds. The bonds sold for $100,000 and pay interest semiannually on June 30 and December 31.

Required:

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1. Prepare the journal entry to record the sale of the bonds.

2020 Jan. 31	Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds PayableCash	Cash	Cash
	Bonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds PayableDiscount on Bonds Payable	Discount on Bonds Payable	Discount on Bonds Payable
	Bonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds PayableBonds Payable	Bonds Payable	Bonds Payable
	Record issuance of bonds at discount

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1. When bonds are issued, any premium or discount is recorded in a separate valuation account.

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2. Calculate the amount of the cash semiannual interest payment. Round your answer to the nearest whole dollar, if required. $fill in the blank 5c102e095052020_1

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2. When calculating interest, consider the principal, the annual interest rate and the time period.

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3. Prepare the entry at June 30, 2020, to recognize the payment of interest and interest expense. Round your answers to the nearest whole dollar, if required.

2020 June 30	CashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds PayableInterest Expense	Interest Expense	Interest Expense
	Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds PayableCash	Cash	Cash
	Bonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds PayableDiscount on Bonds Payable	Discount on Bonds Payable	Discount on Bonds Payable
	Record interest expense

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3. When bonds are issued, any premium or discount is recorded in a separate valuation account.

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4. Calculate the annual interest expense for 2020. Round your answer to the nearest whole dollar, if required. $fill in the blank 97aa86063f96fca_1