Grocery Corporation received $241,560 for $200,000, 10.3 percent bonds issued on
ID: 2477844 • Letter: G
Question
Grocery Corporation received $241,560 for $200,000, 10.3 percent bonds issued on January 1, 2008, at a market interest rate of 7.3 percent. The bonds stated that interest would be paid each December 31 and that they mature on December 31, 2017 and assume Grocery Corporation uses the effective-interest method to amortize the bond premium.
Prepare the journal entry to record the bond issue (jan 1 2008)
Prepare the journal entries to record the December 31 interest payments in 2008 and 2009. (2 entries)
Requirement 1:Prepare the journal entry to record the bond issue (jan 1 2008)
Requirement 2:Prepare the journal entries to record the December 31 interest payments in 2008 and 2009. (2 entries)
Explanation / Answer
1. journal Entry to record Bond Issue:
Cash a/c Dr. $200,000
Discount on Bonds Payable a/c Dr $41,560
To Bonds Payable a/c Cr 241,560
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.