BOND DISCOUNT AMORTIZATION Zee Company sold an issue of $500,000, 9%, 10-year bonds for $468,845 on April
Question:
BOND DISCOUNT AMORTIZATION Zee Company sold an issue of $500,000, 9%, 10-year bonds for $468,845 on April 1. The interest is payable semiannually on October 1 and April 1. The market rate of interest at the time the bonds were issued was 10%. Journalize the following transactions (round all amounts to the nearest dollar).
Oct. 1 Paid the first semiannual interest payment and amortized the bond discount, using the effective interest method.
Dec. 31 Made the adjusting entry for bond interest accrued and amortization of the bond discount from October 1.
Jan. 2 Reversed the adjusting entry for bond interest accrued and bond discount amortization as of December 31.
Apr. 1 Paid the second semiannual interest payment and amortized the bond discount.
Step by Step Answer:
DATE Oct 1 Bond Interest Expense DESCRIPTION Jan Discount on Bonds Payable Cash Dec 31 Bond ...View the full answer
