TEST 5 TAKE HOME PROBLEMS Read-Only - Compatibility Mode -Saved to this PC ian s

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TEST 5 TAKE HOME PROBLEMS Read-Only - Compatibility Mode -Saved to this PC ian sign Layout References Mailings Review View Help Tell me what you want to d 14 ?. 2-E- Emphasis Heading 1 Heading 2||Normal| Stro Font Paragraph Styles PROBLEM 3: On January 1, 2012 Jones Company issued bonds with a face value of $750,000. The bonds carry an interest rate of 8% payable each January 1. Prepare the journal entry for the issuance assuming the bonds are issued at 96. Prepare the journal entry for the issuance assuming the bonds are issued at 103. a. b. PROBLEM 4: on April 1. Parilo Company horrous S75 000 from West Bank by signing a 61 month 5% interest heari

Explanation / Answer

SOLUTION

S.No. Account titles and Explanation Debit ($) Credit ($) 1. Cash ($750,000 * 96%) 720,000 Discount on bonds payable 30,000 Bonds payable 750,000 (To record issunace of bonds at discount) 2. Cash ($750,000 * 103%) 772,500 Bonds payable 750,000 Premium on bonds payable 22,500 (To record issunace of bonds at premium)

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