Problem 10-5A Slocombe Company sold $6,000,000, 7%, 15-year bonds on January 1,

ID: 2571303 • Letter: P

Question

Problem 10-5A Slocombe Company sold $6,000,000, 7%, 15-year bonds on January 1, 2014 . The bonds were dated January 1, 2014, and pay interest on December 31. The bonds were sold at 98. Prepare the journal entry to record the issuance of the bonds on January 1, 2014. (Crediraccount titles are automatically indented when amount is entered. Do not indent Date Account Titles a Debit Credit Jan. 1 cash Discount on Bonds Payable 12000 Bonds Payable 600000 SHOW LIST OF ACCOUNTS VIDEO SIMILAR PROBLEM At December 31, 2014, $8,000 of the bond discount had been amortized. Show the long-term liability balance sheet presentation of the bond liability at December 31, 2014 Balance Sheet (Partial) December 31, 2014 Current Liabilities Interest Payable

Explanation / Answer

Answer:

Slocombe company

Balance sheet (partial)

December ,31,2014

Long term liability

Bonds payable

6,000,000

Less:

Discounts on Bonds payable

112000

5,888,000

(120,000-8000)

date

Description

Debit $

Credit $

jan-1-2014

Cash (6,000,000*98%)

5880000

Discounts on bonds payable
(6,000,000*2%)

120000

To Bonds payable

6000000