Trivial Corporation (with a December 31 year-end) issued $415,000, 2% bonds due in 5 years on May 1, 2013. Interest is paid semi-annually on October 31 and April 30 of each year. On the issuance date, the market rate of interest was 3%, resulting in a price of $396,200 for these bonds. The premium/discount is amortized using the straight-line method.

Do not enter dollar signs or commas in the input boxes. Round your answers to the nearest whole number. For transactions with more than one debit or credit, enter the accounts in alphabetical order. a) Is this bond issued at a discount or at a premium?: AnswerDiscountPremium Prepare the journal entry on May 1, 2013, to issue the bonds.

Date	Account Title and Explanation	Debit	Credit
May 1	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer

b) Prepare the journal entry on October 31, 2013, to record the first interest payment and the amortization of the premium/discount.

Date	Account Title and Explanation	Debit	Credit
Oct 31	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer

c) Prepare the adjusting entry on December 31, 2013.

Date	Account Title and Explanation	Debit	Credit
Dec 31	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense	Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer
	AnswerAccounts PayableAccounts ReceivableAdvertising ExpenseBonds PayableCashCommon StockCost of Goods SoldDiscount on BondsInterest ExpenseInterest PayableInterest ReceivableInterest RevenueInventoryPremium on BondsPrepaid RentRent ExpenseSalaries ExpenseSales RevenueSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned RevenueUtilities Expense		Answer