Sunland Inc. issued $150,000, 5-year bond on January 1, 2024 paying 6% interest on a semi-annual...

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Sunland Inc. issued $150,000, 5-year bond on January 1, 2024 paying 6% interest on a semi-annual basis every January 1 and July 1. Prepare the first-year journal entries for the bond issue and interest expense assuming that the company uses the effective interest method, a market interest rate of 5% and has a year-end of December 31, 2024. (Round answer to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Date January 1 Cash Bonds Payable July 1 Interest Expense Bonds Payable cash Debit 156,564 3,914 586 December 31 Interest Expense 3899 Bonds Payable Interest Payable 601 Credit 156,564 4500 4500 Sunland Inc. issued $150,000, 5-year bond on January 1, 2024 paying 6% interest on a semi-annual basis every January 1 and July 1. Prepare the first-year journal entries for the bond issue and interest expense assuming that the company uses the effective interest method, a market interest rate of 5% and has a year-end of December 31, 2024. (Round answer to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Date January 1 Cash Bonds Payable July 1 Interest Expense Bonds Payable cash Debit 156,564 3,914 586 December 31 Interest Expense 3899 Bonds Payable Interest Payable 601 Credit 156,564 4500 4500

Answer rating: 100% (QA)

Heres a breakdown of the entries January 1 2024 Cash is debited for 156564 which reflects the presen... View the full answer