Brief Exercise 10-11 Frankum Company has issued three different bonds during 201

Question

Brief Exercise 10-11

Frankum Company has issued three different bonds during 2017. Interest is payable annually on each of these bonds.

Prepare the journal entries to record each bond transaction at the date of issuance. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

list of usable accounts:

Accounts Payable
Accounts Receivable
Accumulated Depreciation-Equipment
Bonds Payable
Cash
Common Stock
Cost of Goods Sold
Depreciation Expense
Discount on Bonds Payable
Equipment
Federal Income Taxes Payable
Federal Uemployment Taxes Payable
FICA Taxes Payable
Gain on Bond Redemption
Income Tax Expense
Income Tax Payable
Insurance Expense
Interest Expense
Interest Payable
Inventory
Lease Liability
Loss on Bond Redemption
Mortgage Payable
Notes Payable
Notes Receivable
Other Operating Expenses
Paid-in Capital in Excess of Par-Common Stock
Payroll Tax Expense
Preferred Stock
Premium on Bonds Payable
Prepaid Insurance
Retained Earnings
Salaries and Wages Expense
Salaries and Wages Payable
Sales Revenue
Sales Taxes Payable
Service Revenue
State Income Taxes Payable
State Unemployment Taxes Payable
Subscription Revenue
Ticket Revenue
Unearned Service Revenue
Unearned Subscription Revenue
Unearned Ticket Revenue

1. On January 1, 2017, 1,400, 6%, 5-year, $1,400 bonds dated January 1, 2017, were issued at face value. 2. On July 1, $833,000, 7%, 5-year bonds dated July 1, 2017, were issued at 102. 3. On September 1, $340,000, 5%, 5-year bonds dated September 1, 2017, were issued at 99.

Explanation / Answer

1-Jan Cash 1960000 =1400*1400       Bonds Payable 1960000 1-Jul Cash 849660 =833000*1.02       Bonds Payable 833000       Premium on Bonds Payable 16660 1-Sep Cash 336600 =340000*0.99 Discount on Bonds Payable 3400       Bonds Payable 340000

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