Straight-line premium Amortization : On April 30,2010, Hackman corporation issue

Question

Straight-line premium Amortization: On April 30,2010, Hackman corporation issued $1 million face value 12% bond dated january1,2010, for $1023,000 plus accrued interest. the bond pay interest semiannually on june 30,and Dec 31, and are due dec 31,2017 the company use the straight line amortization method. Required: record the issuance of the bond and the first two interest payments. Straight-line premium Amortization: On April 30,2010, Hackman corporation issued $1 million face value 12% bond dated january1,2010, for $1023,000 plus accrued interest. the bond pay interest semiannually on june 30,and Dec 31, and are due dec 31,2017 the company use the straight line amortization method. Required: record the issuance of the bond and the first two interest payments.

Explanation / Answer

Jan 1, 2010 Cash 96,149

Discount on Bonds Payable 3,851


Bonds Payable
100,000
June 30, 2010 Interest Expense 4,807


Discount on Bonds Payable
307

Cash
4,500
Dec 31, 2010 Interest Expense 4,822


Discount on Bonds Payable
322

Cash
4,500

Jan 1, 2010 Cash 96,149

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