Problem 10-8A (Part Level Submission) Pina Corporation sold $2,160,000, 8%, 5-ye

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Problem 10-8A (Part Level Submission)

Pina Corporation sold $2,160,000, 8%, 5-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on January 1. Pina Corporation uses the straight-line method to amortize bond premium or discount.

Problem 10-8A (Part Level Submission)

Pina Corporation sold $2,160,000, 8%, 5-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on January 1. Pina Corporation uses the straight-line method to amortize bond premium or discount.

(a) Your answer is correct. Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2017, assuming that the bonds sold at 102 account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 TCash 2203200 Bonds Payable 2160000 Bonds Payable Premium on Bonds Payable 43200 Dec. 31 Interest Expense 164160 Premium on Bonds Payable 8640 Interest Payable 172800

Explanation / Answer

b Jan-01 Cash 2116800 Discount on bonds payable 43200        Bonds payable 2160000 Dec-31 Interest expense 181440          Discount on bonds payable 8640           Cash 172800

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