On the first day of the fiscal year, a company issues an $7,500,000, 8%, five-year bond that pays semiannual interest of $300,000 ($7,500,000 8% ), receiving cash of $7,740,000. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles.

Premium amortization

Instructions

Chart of Accounts

Journal

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Instructions

On the first day of the fiscal year, a company issues an $7,500,000, 8%, five-year bond that pays semiannual interest of $300,000 ($7,500,000 8% ), receiving cash of $7,740,000.

Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles.

X

Chart of Accounts

CHART OF ACCOUNTS

General Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
126	Interest Receivable
127	Notes Receivable
131	Merchandise Inventory
141	Office Supplies
191	Land
194	Office Equipment
195	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
221	Salaries Payable
231	Sales Tax Payable
232	Interest Payable
241	Notes Payable
251	Bonds Payable
252	Discount on Bonds Payable
253	Premium on Bonds Payable

	EQUITY
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
351	Cash Dividends
352	Stock Dividends
390	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
611	Gain on Redemption of Bonds

	EXPENSES
510	Cost of Merchandise Sold
515	Credit Card Expense
516	Cash Short and Over
522	Office Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Repairs Expense
535	Rent Expense
536	Insurance Expense
537	Office Supplies Expense
541	Bad Debt Expense
562	Depreciation Expense-Office Equipment
590	Miscellaneous Expense
710	Interest Expense
711	Loss on Redemption of Bonds

n the first day of the fiscal year, a company issues an $7,500,000, 8%, five-year bond that pays semiannual interest of $300,000 ($7,500,000 8% ), receiving cash of $7,740,000.

Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles.

X

Chart of Accounts

CHART OF ACCOUNTS

General Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
126	Interest Receivable
127	Notes Receivable
131	Merchandise Inventory
141	Office Supplies
191	Land
194	Office Equipment
195	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
221	Salaries Payable
231	Sales Tax Payable
232	Interest Payable
241	Notes Payable
251	Bonds Payable
252	Discount on Bonds Payable
253	Premium on Bonds Payable

	EQUITY
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
351	Cash Dividends
352	Stock Dividends
390	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
611	Gain on Redemption of Bonds

	EXPENSES
510	Cost of Merchandise Sold
515	Credit Card Expense
516	Cash Short and Over
522	Office Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Repairs Expense
535	Rent Expense
536	Insurance Expense
537	Office Supplies Expense
541	Bad Debt Expense
562	Depreciation Expense-Office Equipment
590	Miscellaneous Expense
710	Interest Expense
711	Loss on Redemption of Bonds

Joumalize the first interest payment and the amortization of the related bond premium on June 30. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF DEBIT CREDIT ASSETS LIABILITIES