Problem 10-2A Straight-Line: Amortization of bond discount LO P1, P2 Hillside is

Question

Problem 10-2A Straight-Line: Amortization of bond discount LO P1, P2 Hillside issues $2.600,000 of 5%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,246,690 Required: 1. Prepare the January 1, 2015, journal entry to record the bonds' issuance. View transaction list Journal entry worksheet Record the issue of bonds with a par value of $2,600,000 cash on January 1, 2015 at an issue price of $2,246,690. Note: Enter debits before credits Debit Credit Date General Journal 260000 Jan 01, 2015 Cash

Explanation / Answer

Solution 1:

Journal Entries - Hillside Date Particulars Debit Credit 1-Jan-15 Cash A/c Dr $2,246,690.00 Discount on Bond A/c Dr $353,310.00       To Bond Payable A/c $2,600,000.00 (Being Bond issued at discount)

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