On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $6,600,000 of 7-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of $5,946,703. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. Cash v 5,946,703 Discount on Bonds Payable v 653,297 Bonds Payable v 6,600,000 Feedback V Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar Interest Expense Discount on Bonds Payable Cash b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.

On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $6,600,000 of 7-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of $5,946,703. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. Cash v 5,946,703 Discount on Bonds Payable v 653,297 Bonds Payable v 6,600,000 Feedback V Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar Interest Expense Discount on Bonds Payable Cash b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 72E: Exercise Interest Payments and Interest Expense for Bonds (Straight Line) On January 1, 2020, Perry...

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