On January 1 2017 Ultra Vision Corp issued 1290000 of 20year

On January 1, 2017, Ultra Vision Corp. issued $1,290,000 of 20-year 8.0% bonds that pay interest semiannually on June 30 and December 31. Assume the bonds were sold at (1) 98; and (2) 102. Journalize the issuance of the bonds at 98 and 102. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)

Solution

Journal Entries 1) Bonds sold at discount Accounting titles & discount Debit Credit Cash (1,290,000*.98) 1264200 Discount on bonds payable 25800 Bonds payable 1,290,000 2) Bonds sold at premium Accounting titles & discount Debit Credit Cash (1,290,000*1.02) 1315800 Premium on bonds payable 25800 Bonds payable 1,290,000