Question
Swanson Corporation issued $7,900,000 of 20-year , 8 percent bonds on April 1, 2011, at 102. Interest is due on MArch 31 and Sept. 30
Swanson Corporation issued $7,900,000 of 20-year , 8 percent bonds on April 1, 2011, at 102. Interest is due on MArch 31 and Sept. 30 of each year, and all of the bonds in the issue mature on March 31, 2031. Swanson's fiscal year ends on December 31. Prepare the following journal entries.
a. Prepare the journal entry at April 1, 2011, to record the issuance of bonds
Cash=debit=
Premium on bond payable=credit=
bond payable=credit=
b. prepare the journal entry at September 30, 2011 yo pay interest and to amortize the bond premium.
bond interest expense=debit=
premium on bond payable=credit=
bond payable =credit=
c. Prepare the journal entry at March 31, 2031, to pay interest, amortize the bond premium, and retire the bonds at maturity
March 31, 2031
bond interest expence= debit=
bond interest payable =debit=
premium on bonds payable =debit=
cash= credit=
March 31, 2031
Bonds payable debit= credit=
cash= credit=
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