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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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On January 1, 2019 (the authorization date), Temple Company issues $500,000 of 9% bonds at 103. These bonds pay interest on June 30 and December 31. Prepare the journal entry to record the issuance of the bonds.

To determine

Prepare journal entry to record issuance of bonds.

Explanation

Bonds:

Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Prepare journal entry to record issuance of bonds as on 1st January 2019.

DateAccount titles and ExplanationDebitCredit
January 1, 2019Cash (1)$515,000  
      Premium on bonds payable  $15,000
       Bonds payable $500,000
 (To record issuance of bonds payable)  

Table (1)

Working note:

(1)Calculate cash proceeds...

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