Splish Brothers Inc. issues $4.8 million, 5-year, 7% bonds at 102, with interest

Question

Splish Brothers Inc. issues $4.8 million, 5-year, 7% bonds at 102, with interest payable on January 1. The straight-line method is used to amortize bond premium.

(b) Your answer is partially correct. Try again. Prepare the journal entry to record interest expense and bond premium amortization on December 31, 2017, assuming no previous accrual of interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Dec. 31 Interest Expense Debit Credit Cash Premium on Bonds Payable SHOW LIST OF ACCOUNTS LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Attempts: 1 of used SAVE FOR LATER SUBMIT ANSWER SUBMIT ANSWER

Explanation / Answer

Journal Entry Date Account Title & Explanation Debit Credit Remarks Dec 31 Interest Expense on Bonds A/c Dr 31680000 (Int payable less Premiun Amortised) Premiun on Bonds Payable A/c Dr 1920000 Note 3 To Cash/Bank A/c 33600000 Note 4 Note 1: Calculation of Premium of Bonds Payable Details Amt in $ Issue price of Bonds 102 Face Value of Bonds 100 Premium Per Bond 2 Note 2: Calculation of Total Premiun on Bonds Amt in $ Details Per Bond For 4800000 Bonds Issue price of Bonds 102 489600000 Face Value of Bonds 100 480000000 Premium Per Bond ( Note 1) 2 9600000 Note 3: Amortisation Amount Every Year 3a)Life of Bonds 5 Years b)Premium to be amortised (Note 2) 9600000 c)Premium to be amortised every year (3b / 3a) 1920000 Note 4: Interest Amount to be paid every year 4a)Rate of Interest 7 % 4b)Face Value of Bonds ( Note 2) 480000000 4c)Interest Amount to be paid every year( 4b*4a) 33600000

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.