Exercise 10-20 Your answer is partially correct. Try again. Prophet Company issu

Question

Exercise 10-20 Your answer is partially correct. Try again. Prophet Company issued $675,000, 6%, 30-year bonds on January 1, 2014, at 105. Interest is payable annually on January 1. Prophet uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The accrual of interest and the premium amortization on December 31, 2014 (c) The payment of interest on January 1, 2015 (d) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. No. Date Account Titles and Explanation Debit Credit (a) Tjan. 1, 2014 Cash 708,750 Bonds Payable 675,000 Premium on Bonds Pay 33,750 (b) Dec. 31, 2014 Interest Expense 41,625 Interest Payable 40,500 Premium on Bonds Pay 1,125 (C)TJan. 1, 2015 |Interest Payable 40,500 Cash 40,500 (d)TJan. 1, 2044 |Bonds Payable 675,000 Cash 675,000 SHOW LIST OF ACCOUNTS

Explanation / Answer

b Dec-31-14 Interest expense 39375 Premium on bonds payable 1125 =33750/30           Interest payable 40500

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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