The Buffalo Company issued $360,000 of 11% bonds on January 1, 2017. The bonds a
ID: 2596329 • Letter: T
Question
The Buffalo Company issued $360,000 of 11% 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 97.
Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Buffalo 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
January 1, 2017
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
No. Date Account titles and explanation Debit Credit (a) Jan. 1, 2017 Cash($360,000 × 0.97) $349,200 Discount on Bonds Payable $10,800 Bonds Payable $360,000 (b) July 1, 2017 Interest Expense $20,880 Cash $19,800 Discount on Bonds Payable $1,080 (c) Dec. 31, 2017 Interest Expense $20,880 Interest Payable $19,800 Discount on Bonds Payable $1,080
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