Journal Entries, 20Y4

PAGE 15

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1	Jan. 1	Cash		1,008,960.00		?
2		Premium on Bonds Payable			58,960.00		?
3		Bonds Payable			950,000.00		?
4	Jun. 30	Interest Expense		18,427.00				?
5		Premium on Bonds Payable		2,948.00			?
6		Cash			21,375.00	?
7	Jul. 1	Cash		1,921,280.00		?
8		Discount on Bonds Payable		78,720.00			?
9		Bonds Payable			2,000,000.00		?
10	Oct. 1	Cash		1,100,000.00		?
11		Notes Payable			1,100,000.00		?
12	Dec. 31	Interest Expense		18,427.00				?
13		Premium on Bonds Payable		2,948.00			?
14		Cash			21,375.00	?
15	31	Interest Expense		16,500.00				?
16		Interest Payable			16,500.00		?
17	31	Interest Expense		41,560.00				?
18		Discount on Bonds Payable			6,560.00		?
19		Cash			35,000.00	?
20	31	Income Summary		94,914.00				?
21		Interest Expense			94,914.00			?

Review the journal entries on the SpringFit Corporation panel, then answer the following questions.

6.	How much interest was paid during the year on the bonds in question (5)?
7.	Assuming that straight-line amortization is used for the bonds in (5), what is the bond life?
8.	What is the carrying value of the bonds in question (5) at the end of the year?
9.	Considering only the 20Y4 journal entries, how much interest was probably accrued on the note payable issued during the year?