Dobbs Company issues 696, two-year bonds, on December 31, 2017, with a par value

Question

Dobbs Company issues 696, two-year bonds, on December 31, 2017, with a par value of $101,000 and semiannual interest payments. Semiannual Period-End () 12/31/2017 (1) 6/30/2018 (2) 12/31/2018 (3) 6/30/2019 (4) 12/31/2019 Carrying Value Unamortized Discount $6,020 4,515 3,010 1,505 $ 94,980 96,485 97,990 99,495 101,000 Use the above straight-line bond amortization table and prepare journal entries for the following Required (a) The issuance of bonds on December 31, 2017. (b) The first through fourth interest payments on each June 30 and December 31 (C) Record the maturity of the bonds on December 31, 2019 Complete this question by entering your answers in the tabs below Required A Required BRequired C The first through fourth interest payments on each June 30 and December 31 View transaction list

Explanation / Answer

Journal entries Date Account titles & Explanations Debit Credit a) 12/31/2017 Cash 94,980 Discount on bonds payable 6,020 Bonds payable 101,000 b) 6/30/2018 interest expense 4535 Discount on bonds (6020/4) 1505 cash (101000*3%) 3030 12/31/2018 interest expense 4535 Discount on bonds (6020/4) 1505 cash (101000*3%) 3030 6/30/2019 interest expense 4535 Discount on bonds (6020/4) 1505 cash (101000*3%) 3030 12/31/2019 interest expense 4535 Discount on bonds (6020/4) 1505 cash (101000*3%) 3030 c) Bonds payable 101,000 cash 101,000

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