Question 1 On June 30, 2017 Sandhill Company issued $3,800 000 ace value of 139

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Question 1 On June 30, 2017 Sandhill Company issued $3,800 000 ace value of 139 discount. The bonds pay semiannual interest on June 30 and December 31 20-year bonds at S4,085 872, a ield of 12% and I uses the effective interest method to amor e bond premium or Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (1) The issuance of the bonds on June 30, 2017. (2) The payment of interest and the amortization of the premium on December 31, 2017 (3) The payment of interest and the amortization of the premium on June 30, 2018. (4) The payment of interest and the amortization of the premium on December 31, 2018

Explanation / Answer

Date Cash paid Interest expense Premium amortization Carrying value Jun-30-17 4085872 Dec-31-17 247000 245152 1848 4084024 Jun-30-18 247000 245041 1959 4082065 Dec-31-18 247000 244924 2076 4079989 Jun-30-17 Cash 4085872       Bonds payable 3800000       Premium on Bonds payable 285872 Dec-31-17 Interest expense 245152 Premium on Bonds payable 1848       Cash 247000 Jun-30-18 Interest expense 245041 Premium on Bonds payable 1959       Cash 247000 Dec-31-18 Interest expense 244924 Premium on Bonds payable 2076       Cash 247000

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