Yale Corporation issued $36,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1. Yale amortizes any bond discount or premium using the effective interest amortization method. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates. a. January 1, for issuance of bonds. b. June 30, for the first interest payment. • Note: Round your answer to the nearest whole dollar. Date a. Jan. 1 Account Name Cash Discount and Debt Issuance Costs Bonds Payable To record the issuance of bonds. b. June 30 Interest Expense Discount on Bonds Payable Cash To record the first interest payment. V V V V V Dr. 38,558 2,558 0 1,515 0 0 Cr. 0x 0x 36,000✔ 0✔ 75 ✓ 1,440✔
Yale Corporation issued $36,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1. Yale amortizes any bond discount or premium using the effective interest amortization method. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates. a. January 1, for issuance of bonds. b. June 30, for the first interest payment. • Note: Round your answer to the nearest whole dollar. Date a. Jan. 1 Account Name Cash Discount and Debt Issuance Costs Bonds Payable To record the issuance of bonds. b. June 30 Interest Expense Discount on Bonds Payable Cash To record the first interest payment. V V V V V Dr. 38,558 2,558 0 1,515 0 0 Cr. 0x 0x 36,000✔ 0✔ 75 ✓ 1,440✔
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
7
Transcribed Image Text:Recording Bonds Issued at a Discount-Effective Interest
Yale Corporation issued $36,000, 8% (cash interest payable semiannually on June 30 and December 31) 10-year bonds dated and sold on January 1. Yale amortizes any bond discount or premium using the effective interest
amortization method. If the bonds were sold to yield 9%, provide journal entries to be made at each of the following dates.
a. January 1, for issuance of bonds.
b. June 30, for the first interest payment.
• Note: Round your answer to the nearest whole dollar.
Date
a. Jan. 1
Account Name
Cash
Discount and Debt Issuance Costs
Bonds Payable
To record the issuance of bonds.
b. June 30 Interest Expense
Discount on Bonds Payable
Cash
To record the first interest payment.
Dr.
38,558
2,558
0
1,515
0
0
Cr.
0x
0x
36,000
0✔
75 ✔
1,440✔
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning