Brief Exercise 14-3 No. Date Account Titles and Explanation Debit Credit January

Question

Brief Exercise 14-3

No.

Date

Account Titles and Explanation

Debit

Credit

January 1, 2017

Brief Exercise 14-3

The Concord Company issued $360,000 of 7% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 99.

Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Concord Company records straight-line amortization semiannually. (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. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.)

No.

Date

Account Titles and Explanation

Debit

Credit

(a)

January 1, 2017

(b)

Jan. 1, 2017July 1, 2017Dec. 31, 2017

(c)

Jan. 1, 2017July 1, 2017Dec. 31, 2017

Explanation / Answer

SOLUTION

Date Account titles and Explanations Debit ($) Credit ($) Jan.1 Cash ($360,000*99%) 356,400 Discount on Bonds Payable 3,600 Bonds Payable 360,000 July 1 Interest Expense 12,960 Cash ($360,000*7%*6/12) 12,600 Discount on Bonds Payable ($3,600/5*6/12) 360 Dec.31 Interest Expense 12,960 Interest Payable($360,000*7%*6/12) 12,600 Discount on Bonds Payable($3,600/5*6/12) 360

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