Problem 14-6

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Presented below are selected transactions on the books of Coronado Corporation.

May 1, 2017 Bonds payable with a par value of $877,200, which are dated January 1, 2017, are sold at 106 plus accrued interest. They are coupon bonds, bear interest at 13% (payable annually at January 1), and mature January 1, 2027. (Use interest expense account for accrued interest.)

Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper amount of premium. (Use straight-line amortization.)

Jan. 1, 2018 Interest on the bonds is paid.

April 1 Bonds with par value of $350,880 are called at 102 plus accrued interest, and redeemed. (Bond premium is to be amortized only at the end of each year.)

Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized.

Prepare journal entries for the transactions above. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit May 1, 2017 Cash Bonds Payable 877200 Premium on Bonds Payable 52632 Interest Expense Dec. 31, 2017 Interest Expense Interest Payable (To record the interest) Premium on Bonds Payable 3630 Interest Expense 3630 (To amortize the premium)