iPad 12:13 PM * 15%D @edugen.wileyplus.com WileyPLUS Help System Announcements V

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iPad 12:13 PM * 15%D @edugen.wileyplus.com WileyPLUS Help System Announcements VAIHAUDITIS Kimmel, Financial Accounting, 8e, Custom for University of Akron + CALCULATOR PRINTER VERSION 4 BACK NEXT > ASSIGNMENT RESOURCES Post-Class Chpt 10A Problem 10-8A (Part Level Submission) Problem 10-2A (Part Indigo Corporation sold $3,170,000, 7%, 5-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and Level Submission) pay interest on January 1. Indigo Corporation uses the straight-line method to amortize bond premium or discount. Problem 10-4A (Part Level Submission) (a) Problem 10-8A (Part Level Submission) Your answer is correct. Expand Your Critical Thinking 10.3 Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2017, assuming that the bonds sold at 106. (Credit account titles are automatically indented when amount is entered. Do not Review Score indent manually.) Review Results by Study Objective Date Account Titles and Explanation Debit Credit Jan. 1 TCash 3602anir T Premium on Bonds Payable 190200 Bonds Payable IT 3170000 Dec. 31 Interest Expense 183860 Premium on Bonds Payable 38040 I nterest Payable 221900 SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 2 of 2 used (b) Prepare journal entries to record the issuance of the bonds and bond interest expense for 2017, assuming that the bonds sold at 97. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Cash Discount on Bonds Payable Bonds Payable 3170000 Dec. 31 Interest Expense Cash Discount on Bonds Payable SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 0 of 2 used SAVE FOR LATER SUBMIT ANSWER ? (c) The parts of this question must be completed in order. This part will be available when you complete the part above.

Explanation / Answer

Please find answer of part b) below.

b) Debit Credit 1-Jan Cash (3170000*97%) $        3,074,900 Discount on bonds payable $              95,100 Bonds payable $        3,170,000 31-Dec Interest Expenses $            240,920 Discount on bonds payable (95100/5) $              19,020 Cash (3170000*7%) $            221,900

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