On December 31, 2015, Wintergreen, Inc., ssued $150,000 ot 7 percent, 10-year bo

Question

On December 31, 2015, Wintergreen, Inc., ssued $150,000 ot 7 percent, 10-year bonds at a price of 93 25. Wintergreen received $139,875 when t issued the bonds (or $150,000 x.9325). After recording the related entry, Bonds Payable had a balance of $150,000 and Discounts on Bonds Payable had a balance of $10,125. Wintergreen uses the straight-line bond amortization method. The first semiannual interest payment was made on June 30, 2016. Complete the necessary journal entry for June 30, 2016 by selecting the account names and dollar amounts from the down menus. Date Account Title Debit Credit June 30 select select eofect Cash

Explanation / Answer

Journal Entry: Date Account Titles Debit $ Credit $ 30-Jun Bond Interest Expense 5250 (150000*7/200) Discount on Bonds Payable 506.25 (10125/20) Cash 4743.75 (being interst expense booked and amortisation of discount on issue taken up on straight line basis)

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