On December 31,

2018,

when the market interest rate is

6%,

Benson Realty

issues

$700,000

of

6.25%,

10-year

bonds payable. The bonds pay interest semiannually.

Benson Realty

received

$713,234

in cash at issuance.

Requirements

1.	Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.)
2.	Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments.

Requirement 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.)

		Interest		Carrying
	Cash Paid	Expense	Amortized	Amount
12/31/2018
06/30/2019
12/31/2019

Requirement 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. (Record debits first, then credits. Select explanations on the last line of the journal entry. Round your answers to the nearest whole dollar.)

Start by journalizing the issuance of the bonds on December 31,

2018.

Date			Accounts and Explanation	Debit	Credit
2018
Dec. 31

Journalize the payment of the first semiannual interest amount and amortization of the bond on June 30,

2019.

Date			Accounts and Explanation	Debit	Credit
2019
Jun. 30

Journalize the payment of the second semiannual interest amount and amortization of the bond on December 31,

2019.

Date			Accounts and Explanation	Debit	Credit
2019
Dec. 31

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