Question

1. Journalize the following transactions of Trahn Communications, Inc.:
2014
Jan 1 Issued $4,000,000 of 5%, 10-year bonds payable at 94. Interest payment dates are July 1 and January 1.
Jul 1 Paid semiannual interest and amortized the bond discount by the straight-line method on the 5% bonds payable.
Dec 31 Accrued semiannual interest expense and amortized the bond discount by the straight-line method on the 5% bonds payable.
2015
Jan 1 Paid semiannual interest.
2024
Jan 1 Paid the 5% bonds at maturity.
2. At December 31, 2014, after all year-end adjustments, determine the carrying amount of Trahn Communications bonds payable, net.
3. For the six months ended July 1, 2014, determine the following for Trahn Communications Inc:
a. Interest expense
b. Cash interest paid
What causes interest expense on the bonds to exceed cash interest paid?



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  • CreatedJuly 25, 2014
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