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On the first day of the fiscal year, a company issues a $525,000, 6%, 10-year bond that pays semiannual interest of $15,750 ($525,000 x 6%

On the first day of the fiscal year, a company issues a $525,000, 6%, 10-year bond that pays semiannual interest of $15,750 ($525,000 x 6% x 1/2), receiving cash of $551,300. Journalize the entry to record the first interest payment and amortization of premium using the straight-line method.

If an amount box does not require an entry, leave it blank.

A.

Interest Expense ___________ __________

Premium on Bonds Payable ___________ __________

Cash ____________ ___________

B.

On the first day of the fiscal year, a company issues a $950,000, 8%, 5-year bond that pays semiannual interest of $38,000 ($950,000 x 8% 1/2), receiving cash of $884,177. Journalize the entry to record the issuance of the bonds.

Cash ________ _______

Discount on Bonds Payable _________ _______

Bonds Payable _________ ________

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