Exercise 1410 On January 1 2017 Au mont Company sold 12 bond

Exercise 14-10 On January 1, 2017, Au mont Company sold 12 bonds having a maturity value of $500,000 for $537 907, which provides the bondholders with a 10% y eli The bonds are i ted an a y 1, 2017, and mature January 1, 2022, with interest payable December 31 of each year. Aumont Company allocates interest and unamortized discount or premium on the effective-interest basis. Your answer is partially correct. Try again. Prepare the journal entry at the date of the bond issuance. (Round answer to O decimal places,e.g. 38,548. If no entry is required, select \"No Entry\" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 11834 Credit January 1, 201 ash 537,907 Bonds Payable 500,000 Premium on Bonds Payable 37907.37

Solution

1-Jan Cash 537907     Bonds payable 500000     Premium on Bonds payable 37907 Date Cash paid Interest expense Premium amortized Carrying amount of bonds 1/1/2017 537907 12/31/2017 60000 53791 6209 531698 12/31/2018 60000 53170 6830 524868 12/31/2019 60000 52487 7513 517355 Dec-31-17 Interest expense 53791 Premium on Bonds payable 6209           Cash 60000 Dec-31-19 Interest expense 52487 Premium on Bonds payable 7513           Cash 60000