FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Bond Discount, Entries for Bonds Payable Transactions
On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $46,000,000 of 20-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $42,309,236. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
For all
- Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1.
20Y1 July 1
1.
- Accounts Payable
- Bonds Payable
- Cash
- Interest Expense
- Interest Payable
- Premium on Bonds Payable
2.
- Accounts Payable
- Bonds Payable
- Discount on Bonds Payable
- Interest Expense
- Interest Payable
- Premium on Bonds Payable
3.
- Bonds Payable
- Cash
- Discount on Bonds Payable
- Interest Expense
- Interest Payable
- Premium on Bonds Payable
- Journalize the entries to record the following:
- The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.
20Y1 Dec. 31
1.
- Bonds Payable
- Cash
- Discount on Bonds Payable
- Interest Expense
- Interest Payable
- Notes Payable
2.
- Bonds Payable
- Discount on Bonds Payable
- Interest Expense
- Interest Payable
- Interest Revenue
- Notes Payable
3.
- Bonds Payable
- Cash
- Interest Expense
- Interest Payable
- Notes Payable
- Premium on Bonds Payable
- The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.
20Y2 June 30.
1.
- Bonds Payable
- Cash
- Discount on Bonds Payable
- Interest Expense
- Interest Payable
- Premium on Bonds Payable
2.
- Accounts Payable
- Bonds Payable
- Discount on Bonds Payable
- Interest Expense
- Interest Payable
- Premium on Bonds Payable
3.
- Accounts Payable
- Bonds Payable
- Cash
- Interest Expense
- Interest Payable
- Premium on Bonds Payable
- Determine the total interest expense for 20Y1.
Fill in the blank
3. Determine the total interest expense for 20Y1.
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