8 of 35 (21 complete) S14-7 (similar to) Obert sund aS40,000, 8%, 10-year bond p

Question

8 of 35 (21 complete) S14-7 (similar to) Obert sund aS40,000, 8%, 10-year bond payable ot on January 1, 2016. 1 Joumalize the issuance of the bond payable on January 1, 2016 Assume bonds payable are amortined using the straight-ine amorization Requirement 1. Joumalize the suance of the bond payable on January 1, 2016 anization method Recoddebb then codis. Select eglantons on thalast IneofthepralentyRand your ar Accounts and Explanation Jan. 1 Choose from any list or enter any umber in the input fields and then click CheckAw MacBook Air option command

Explanation / Answer

Solution:

1) Preparing the Journal Entry to Record the Issuance of the Bond Payable on January 1, 2016:

2) Preparing the Journal Entries to Record the Payment of Semiannual Interest and Amortization of the Bond Discount or Premium on July 1, 2016:

Date General Journal Debit Credit Jan 1, 2016 Cash ($40,000 * 0.93) $37,200 Discount on Bonds Payable $2,800 Bonds Payable $40,000 (To Record the Issuance of the Bond at Discount)

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