Presenting Bond Payable on Statement of Cash Flows Yale Corporation issued a 6%, $120,000 5-year bond dated January 1, with interest payable annually on December 31. The bond was sold to yield 8% interest. Assume that the company uses the effective interest method to amortize bond discounts or premiums. a. Provide journal entries to be made on January 1 and December 31 of this first year. • Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Date Jan. 1 Account Name Cash Bonds Payable Discount on Bonds Payable To record issuance of bond. Dec. 31 Interest Expense Discount on Bonds Payable Interest Payable To record payment of interest. Dr. 125,195 0 9,580 125,195 0 0 Cr. 0x 0x 0x 0x 0x 0x
Presenting Bond Payable on Statement of Cash Flows Yale Corporation issued a 6%, $120,000 5-year bond dated January 1, with interest payable annually on December 31. The bond was sold to yield 8% interest. Assume that the company uses the effective interest method to amortize bond discounts or premiums. a. Provide journal entries to be made on January 1 and December 31 of this first year. • Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Date Jan. 1 Account Name Cash Bonds Payable Discount on Bonds Payable To record issuance of bond. Dec. 31 Interest Expense Discount on Bonds Payable Interest Payable To record payment of interest. Dr. 125,195 0 9,580 125,195 0 0 Cr. 0x 0x 0x 0x 0x 0x
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 13M
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