10.11A Problem 10-11A On January 1, 2014, Jade Company issued $1,967,000 face va
ID: 2497449 • Letter: 1
Question
10.11A
Problem 10-11A On January 1, 2014, Jade Company issued $1,967,000 face value, 7%, 15-year bonds at $2,375,335. This price resulted in a 5% effective-interest rate on the bonds. Jade uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1. Prepare the journal entries to record the following transactions. (Round answers to O decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually. 1. The issuance of the bonds on January 1, 2014. 2. Accrual of interest and amortization of the premium on December 31, 2014. 3. The payment of interest on January 1, 2015 4. Accrual of interest and amortization of the premium on December 31, 2015 No. DateAccount Titles and Explanation Debit Credit 1. Jan. 1, 2014 2. Dec. 31, 2014 3. Jan. 1, 2015 4. Dec. 31, 2015 Show the proper long-term liabilities balance sheet presentation for the liability for bonds payable at December 31, 2015. (Round answers to 0 decimal places, e.g. 125.)Explanation / Answer
Date Account/Description Debit Credit
Jan 1 Cash 2375335
Bonds payable 1967000
Premium on bonds payable 408335
Prepare the journal entry to record the accrual of interest and the amortization of the premium on December 31, 2014.
Date Account/Description Debit Credit
Dec. 31 Bond interest expense 118767
Premium on bonds payable 18923
Bond interest payable 137690
Prepare the journal entry to record the payment of interest and the amortization of the premium on Jan 1, 2015, assuming no accrual of interest on June 30.
Date Account/Description Debit Credit
Jan 1 Bond interest expense 117821
Premium on bonds payable 19869
137690
Prepare the journal entry to record the accrual of interest and the amortization of the premium on December 31, 2015.
Date Account/Description Debit Credit
Dec. 31 Bond interest expense 116827
Premium on bonds payable 20863
Bond interest payable 137690
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.