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akeAssignmentMain.do?inwoker-assignments&cta; assignment-take&inprogress; false eBook Show Me How Calculator Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method year, Chin Company issued $15,200,000 of five-yea, 8% bonds to finance its operations of producing and selling home improvement products. Interest is were issued at a market (effective) interest rate of 9%, resulting in Chin receiving cash or $14,598,670. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual Interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the ne the nearest dollar.) If an amount box does not require an entry, leave it blank. Round your answers to the nearest dollar b. Determine the amount of the bond interest expense for the first year

Explanation / Answer

1 Issuance of Bond Dr.($) Cr.($) Bank A/c Dr 15200000 To Bond 14598633 To Bond Equity 601367 (Being Bonds issued) 2 JE on 30.06. Interest Exp A/c Dr    656,938 Discount on Bond Payable      48,938 Cash 608000 3 JE on 30.12 Interest Exp A/c Dr    659,141 Discount on Bond Payable      51,141 Cash 608000 b) Bond interest exp for 1st year= 656938+659141 1316079 Working Note Amortizaion Schedule Semiannual Intt period Cash Intt paid (15200000*4%) Bond Intt Exp [ carrying value of previous period * 4.5%] Discount amortization[ Bond intt exp - cash intt] Carrying Value [ previous carrying value + discount amortization 01-Jan ######## 30-Jun 608000    656,938      48,938 ######## [For 2] 31-Dec 608000    659,141      51,141 ######## [For 3] 30-Jun 608000    661,442      53,442 ######## 31-Dec 608000    663,847      55,847 ######## 30-Jun 608000    666,360      58,360 ######## 31-Dec 608000    668,986      60,986 ######## 30-Jun 608000    671,731      63,731 ######## 31-Dec 608000    674,599      66,599 ######## 30-Jun 608000    677,595      69,595 ######## 31-Dec 15808000    680,727 ########               (1)

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