Exercise 156 Whitmore Company issued 580000 of 5year 9 bonds

Exercise 156 Whitmore Company issued $580,000 of 5-year, 9% bonds at 97 on January 1, 2017, The bonds pay interest annually. 2] Your answer is partially correct. Try again. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit 562.6000 Discount on Bonds Payable $1740 Bonds Payable 300,000 Your answer is incorrect. Try again. Compute the total cost of borrowing for these bonds. Total cost of borrowing $278400

Solution

Cash 562600 =580000*0.97 Discount on Bonds payable 17400         Bonds payable 580000 Total cost of borrowing = (580000*9%*5)+580000-562600= 278400