Motley Company issued $300,000, 8%, 15-year bonds on December 31, 2021, for $288,000. Interest is payable annually
Question:
Motley Company issued $300,000, 8%, 15-year bonds on December 31, 2021, for $288,000. Interest is payable annually on December 31. Motley uses the straight-line method to amortize bond premium or discount.
Instructions
Prepare the journal entries to record the following events.
a. The issuance of the bonds.
b. The payment of interest and the discount amortization on December 31, 2022.
c. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.
Step by Step Answer:
2021 a Dec31 Cash 288000 Discount on Bonds Payable 12000 Bonds Payable 300000 2022 b Dec31 Inte...View the full answer
Financial Accounting Tools for Business Decision Making
ISBN: 978-1119493631
9th edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Related Video
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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