On May 1 , 2 0 2 3 , Medum Corporation issued a 3 year bond worth $ 3 8 9 , 0 0 0 with an interest rate of 7 per annum Interest is to be paid semi annually on October 3 1 and April 3 0 At the time of the issuance, the market interest rate was 1 2 Medum Corporation amortizes any premium or discount using the effective interest method Calculate the bond issue price and the resulting premium or discount Do not enter dollar signs or commas in the input boxes Round your answers to the nearest whole number For transactions with more than one debit or credit, enter the accounts in alphabetical order For bond calculations, use the PV tables in Chapter 7 of the textbook or use a financial calculator Bond Issue Price $Answer 3 4 1 1 7 9 Premium or Discount $Answer 4 7 8 2 1 b ) Prepare journal entries to record the following bonds payable transactions 1 ) Issuance of bonds on May 1 , 2 0 2 3 Date Account Title and Explanation Debit Credit May 1 Answer Cash Answer 3 4 1 1 7 9 Answer Discount on Bonds Payable Answer 4 7 8 2 1 Answer Bonds Payable Answer 3 8 9 0 0 0 To record bond issuance 2 ) Payment of interest and amortization of premium or discount on October 3 1 , 2 0 2 3 Date Account Title and Explanation Debit Credit Oct 3 1 Answer Interest Expense Answer 2 0 4 7 1 Answer Cash Answer 1 3 6 1 5 Answer Discount on Bonds Payable Answer 6 8 5 6 To record first payment of interest and amortization 3 ) Accrual of interest and amortization of premium or discount on December 3 1 , 2 0 2 3 , which is the company's year end Date Account Title and Explanation Debit Credit Dec 3 1 Answer Interest Expense Answer 6 9 6 1 Answer Discount on Bonds Payable Answer 2 4 2 3 Answer Interest Payable Answer 4 5 3 8 To record the interest accrued on bonds payable 4 ) Payment of interest and amortization of premium or discount on April 3 0 , 2 0 2 4 Date Account Title and Explanation Debit Credit Apr 3 0 Answer Interest Expense Answer Answer Interest Payable Answer 4 5 3 8 Answer Cash Answer 1 3 6 1 5 Answer Discount on Bonds Payable Answer To record payment of interest and amortization 5 ) Redemption of the bond for its carrying value one year before maturity on May 1 Date Account Title and Explanation Debit Credit May 1 Answer Bonds Payable Answer 3 8 9 0 0 0 Answer Cash Answer Answer Discount on Bonds Payable Answer Redemption of bond

Question

On May 1 , 2 0 2 3 , Medum Corporation issued a 3   year bond worth $ 3 8 9 , 0 0 0 with an interest rate of 7   per annum  Interest is to be paid semi   annually on October 3 1 and April 3 0   At the time of the issuance, the market interest rate was 1 2     Medum Corporation amortizes any premium or discount using the effective interest method  Calculate the bond issue price and the resulting premium or discount  Do not enter dollar signs or commas in the input boxes  Round your answers to the nearest whole number  For transactions with more than one debit or credit, enter the accounts in alphabetical order  For bond calculations, use the PV tables in Chapter 7 of the textbook or use a financial calculator  Bond Issue Price  $Answer 3 4 1 1 7 9 Premium or Discount  $Answer 4 7 8 2 1 b ) Prepare journal entries to record the following bonds payable transactions  1 ) Issuance of bonds on May 1 , 2 0 2 3   Date Account Title and Explanation Debit Credit May 1 Answer Cash Answer 3 4 1 1 7 9 Answer Discount on Bonds Payable Answer 4 7 8 2 1 Answer Bonds Payable Answer 3 8 9 0 0 0 To record bond issuance 2 ) Payment of interest and amortization of premium or discount on October 3 1 , 2 0 2 3   Date Account Title and Explanation Debit Credit Oct 3 1 Answer Interest Expense Answer 2 0 4 7 1 Answer Cash Answer 1 3 6 1 5 Answer Discount on Bonds Payable Answer 6 8 5 6 To record first payment of interest and amortization 3 ) Accrual of interest and amortization of premium or discount on December 3 1 , 2 0 2 3 , which is the company's year   end  Date Account Title and Explanation Debit Credit Dec 3 1 Answer Interest Expense Answer 6 9 6 1 Answer Discount on Bonds Payable Answer 2 4 2 3 Answer Interest Payable Answer 4 5 3 8 To record the interest accrued on bonds payable 4 ) Payment of interest and amortization of premium or discount on April 3 0 , 2 0 2 4   Date Account Title and Explanation Debit Credit Apr 3 0 Answer Interest Expense Answer Answer Interest Payable Answer 4 5 3 8 Answer Cash Answer 1 3 6 1 5 Answer Discount on Bonds Payable Answer To record payment of interest and amortization 5 ) Redemption of the bond for its carrying value one year before maturity on May 1   Date Account Title and Explanation Debit Credit May 1 Answer Bonds Payable Answer 3 8 9 0 0 0 Answer Cash Answer Answer Discount on Bonds Payable Answer Redemption of bond

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On May 1 , 2 0 2 3 , Medum Corporation issued a 3 - year bond worth $ 3 8 9 , 0 0

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