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January 2014 issued $6,000,000, 8% 5 year bonds.
Prepare journal entries to show
- Issance of bonds on Jan 1, 2014 receiving $16,511,788 cash
- Accrual of bond interest and recognition of amortization on Dec 31, 2014
Solution
Journal entries Date Accounts title and explanation Debit $ Credit $ Jan1 2014 Cash
account Dr. 6,511,788 Bonds payable 6,000,000 Premium on Bonds payable
511,788 Dec 31 2014 Interest expense Account Dr. 377642.4 Premium on Bonds
payble Dr. (511788/5) 102357.6 Cash account (6000,000*8%) 480000

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January 2014 issued $6,000,000, 8 5 year bonds.Prepare journal en.pdf

  • 1. January 2014 issued $6,000,000, 8% 5 year bonds. Prepare journal entries to show - Issance of bonds on Jan 1, 2014 receiving $16,511,788 cash - Accrual of bond interest and recognition of amortization on Dec 31, 2014 Solution Journal entries Date Accounts title and explanation Debit $ Credit $ Jan1 2014 Cash account Dr. 6,511,788 Bonds payable 6,000,000 Premium on Bonds payable 511,788 Dec 31 2014 Interest expense Account Dr. 377642.4 Premium on Bonds payble Dr. (511788/5) 102357.6 Cash account (6000,000*8%) 480000