2. value: 5.70 points Exercise 10-5 Straight-Line: Recording bond issuance and d
ID: 2524589 • Letter: 2
Question
2. value: 5.70 points Exercise 10-5 Straight-Line: Recording bond issuance and discount amortization LO P1, P2 Dobbs Company issues 5%, two-year bonds, on December 31, 2015, with a par value of $100,000 and semiannual interest payments. Unamortized Discount $6,000 4,500 3,000 1,500 Semiannual Period-End Carrying Value (0) 12/31/2015 (1) 6/30/2016 (2) 12/31/2016 (3) 6/30/2017 (4) 12/31/2017 $ 94,000 95,500 97,000 98,500 100,000 Use the above straight-line bond a mortization table and prepare journa I entries for the following. Required (a)The issuance of bonds on December 31, 2015. View transaction list Journal entry worksheet Record the issue of bonds with a par value of $100,000 cash on December 31, 2015 Note: Enter debits before credits. Date General Journal Debit Credit Dec. 31, 2015 Record entry Clear entry View general journalExplanation / Answer
Solution:
Exercise 10-5
Journal Entries
Date
General Journal
Debit
Credit
Dec.31, 2015
Cash
$94,000
Discount on Bonds Payable
$6,000
Bonds Payable
$100,000
June.30, 2016
Interest Expense
$4,000
Discount on Bonds Payable
$1,500
Interest Payable
(Face Value 100,000*Coupon Rate 5%*1/2 half yearly)
$2,500
Dec.31, 2017
Bonds Payable
$100,000
Cash
$100,000
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Date
General Journal
Debit
Credit
Dec.31, 2015
Cash
$94,000
Discount on Bonds Payable
$6,000
Bonds Payable
$100,000
June.30, 2016
Interest Expense
$4,000
Discount on Bonds Payable
$1,500
Interest Payable
(Face Value 100,000*Coupon Rate 5%*1/2 half yearly)
$2,500
Dec.31, 2017
Bonds Payable
$100,000
Cash
$100,000
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