Recording Bond Issuance Instructions Chart of Accounts Instructions On January 1, 2016, Knorr Corporation issued $1,100,000 of 9%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 10%. Bond issue costs associated with the bonds totaled $20,058.17. Required: Prepare the journal entries to record the following: January 1, 2016 December 31, 2016 December 31, 2016 December 31, 2017 December 31, 2017 Sold the bonds at an effective rate of 10% First interest payment using the effective interest method Amortization of bond issue costs using the straight-line method Second interest payment using the effective interest method Amortization of bond issue costs using the straight-line method Recording Bond Issuance Instructions Chart of Accounts General Journal Present Value Tables Prepare the journal entries to record the following: Additional Instruct January 1, 2016 December 31, 2016 December 31, 2016 December 31, 2017 Sold the bonds at an effective rate of 10% First interest payment using the effective interest method Amortization of bond issue costs using the straight-line method Second interest payment using the effective interest method December 31, 2017 Amortization of bond issue costs using the straight-line method How does grading work? 1 2 3 4 GENERAL JOURNAL POST. REF D ACCOUNT TITLE DATE Jan. 1 Cash Discount on Bonds Payable Bonds Payable Jan. 1 Deferred Bond Issue Costs Cash 5 6 Dec. 31 Interest Expense 7 8 9 10 Discount on Bonds Payable Cash Dec. 31 Interest Expense Deferred Bond Issue Costs C Poi Recording Bond Issuance Instructions Chart of Accounts General Journal Present Value Tables al entries to record the following: Additional Instructions Sold the bonds at an effective rate of 10% First interest payment using the effective interest method Amortization of bond issue costs using the straight-line method Second interest payment using the effective interest method Amortization of bond issue costs using the straight-line method PAGE 2016 PAGE 2017 Score: 165/193 GENERAL JOURNAL POST. REF. DEBIT ACCOUNT TITLE on Bonds Payable Payable Bond Issue Costs Expense on Bonds Payable Expense ed Bond Issue Costs CREDIT 1,100,000.00 99,000.00 4,011.63 4,011.63 Points: 30.78/36 Recording Bond Issuance Instructions Chart of Accounts General Journal Present Value Tables ^ Prepare the journal entries to record the following: Additional Instruct January 1, 2016 December 31, 2016 December 31, 2016 December 31, 2017 December 31, 2017 Sold the bonds at an effective rate of 10% First interest payment using the effective interest method Amortization of bond issue costs using the straight-line method Second interest payment using the effective interest method Amortization of bond issue costs using the straight-line method How does grading work? 1 2 3. 4 GENERAL JOURNAL ACCOUNT TITLE DATE Dec. 31 Interest Expense Discount on Bonds Payable Cash Dec. 31 Interest Expense Deferred Bond Issue Costs POST. REF. Poi Recording Bond Issuance Instructions Chart of Accounts General Journal Present Value Tables al entries to record the following: Additional Instructions Sold the bonds at an effective rate of 10% First interest payment using the effective interest method Amortization of bond issue costs using the straight-line method Second interest payment using the effective interest method Amortization of bond issue costs using the straight-line method GENERAL JOURNAL ACCOUNT TITLE Expense on Bonds Payable Expense ed Bond Issue Costs PAGE 2016 PAGE 2017 Score: 165/193 POST. REF. DEBIT CREDIT 99,000.00 4,011.63 4,011.63 Points: 30.78/36