Please provide the answer in detail! On June 30 2017 Carla Vista Limited issued

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Please provide the answer in detail!

On June 30 2017 Carla Vista Limited issued $6 million of 20-year, 11% bonds for $6,514,802, which provides a yield o 10% The company uses the effective interest discount. The bonds pay semi-annual interest on June 30 and December 31 et odtoa o any bond prem um Question 1 Prepare the journal entries to record the following transactions: (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) 1. The issuance of the bonds on June 30, 2017 2. The payment of interest and the amortization of the premium on December 31, 2017 3. The payment of interest and the amortization of the premium on June 30, 2018 4. The payment of interest and the amortization of the premium on December 31, 2018 Date Account Titles and Explanation Debit Credit June 30, 2017 Dec. 31, 2017 June 30, 2018 Dec. 31, 2018

Explanation / Answer

Journal entries :

Date accounts & explanation debit credit June 30,2017 Cash a/c 6514802 Bonds payable a/c 6000000 Premium on bonds payable a/c 514802 Dec 31,2017 Interest expenses a/c (6514802*10%*6/12) 325740 Amortization of premium on bonds payable a/c 4260 Cash a/c (6000000*11%*6/12) 330000 June 30,2018 Interest expenses a/c (6514802-4260*10%*6/12) 325527 Amortization of premium on bonds payable a/c 4473   Cash a/c (6000000*11%*6/12) 330000 Dec 31,2018 Interest expenses a/c (6514802-4260-4473*10%*6/12) 325303 Amortization of premium on bonds payable a/c 4697 Cash a/c (6000000*11%*6/12) 330000

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