Brief Exercise 146 On January 1 2017 Kingbird Corporation is

Brief Exercise 14-6 On January 1, 2017, Kingbird Corporation issued $470,000 of 7% bonds, due in 8 years. The bonds were issued for $442,618, and pay interest each July 1 and January 1 Kingbird uses the effective-interest method Prepare the company\'s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective- interest rate of 8%. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 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.) No. Date Account Titles and Explanation Debit Credit (a) Jan. 1, 2017Cash 442618 Discount on Bonds Payable 27382 Bonds Payable 470000 (b) July 1, 2017 Interest Expense (C) Dec. 31, 2017 # Click if you would like to Show Work for this question: Open Show Work

Solution

Journal entries :

Date	accounts & explanation	debit	credit
Jan 1,2017	Cash	442618
	Discount on bonds payable	27382
	Bonds payable		470000
July 1,2017	Interest expenses a/c (442618*8%*6/12)	17705
	Amortization on discount on bonds payable		1255
	Cash (470000*7%*6/12)		16450
Dec 31,2017	Interest expenses a/c (442618+1255*8%*6/12)	17755
	Amortization on discount on bonds payable		1305
	Interest payable a/c		16450