question archive 1) a company issued 10-year, 9% bonds with a par value of $500,000 when the market rate was 9
1) a company issued 10-year, 9% bonds with a par value of $500,000 when the market rate was 9
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1) a company issued 10-year, 9% bonds with a par value of $500,000 when the market rate was 9.5%. The company recieved 484,087 in cash proceeds. Using straight-line method, prepare the issuer's journal entry to record the first semi annual interest payment and the amortization of any bond discount or premium.
2) A company has $200,000 par value, 10% bonds outstanding. prepare the company's journal entry to retire the bonds at the due date of maturity
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Answer:1)
1. Discount on bonds = 500,000-484,087 = 15913
Cash Debit $484,087
Discount on Bonds Payable Debit $15913
Bonds Payable (a liability account) Credit $500,000
2. Bonds payable Debit 200,000
Credit Cash 200,000
Answer:2)
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