Homework SourseThe Skysong Company issued 310000 of 12 bonds on January 1 2
The Skysong Company issued $310,000 of 12% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 97.
Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Skysong Company records straight-line amortization semiannually. (If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.)
Solution
Journal entry :
| Date | accounts & explanation | debit | credit |
| 2017 Jan 1 | Cash a/c (310000*97/100) | 300700 | |
| Discount on bonds payable | 9300 | ||
| Bonds payable | 310000 | ||
| (To record issuance of bonds payable) | |||
| 2017 July 1 | Interest expenses a/c | 19530 | |
| Amortization discount on bonds payable (9300/10) | 930 | ||
| Cash a/c (310000*12%*6/12) | 18600 | ||
| ((To record interest paid) | |||
| 2017 Dec 31 | Interest expenses | 19530 | |
| Amortization discount on bonds payable (9300/10) | 930 | ||
| Interest payable | 18600 | ||
| (To record interest payable) |
