Tamarisk Company issued $420,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is...

 

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Tamarisk Company issued $420,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and January 1. Tamarisk Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38.548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest and related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020. Date Account Titles and Explanation Debit Credit 1/1/20 Cash 428400 Bonds Payable 420000 Premium on Bonds Payable 8400 7/1/20 Interest Expense Premium an Bonds Payable Cash 21000 12/31/20 Interest Expense Premium on Bands Payable Interest Payable 21000 Tamarisk Company issued $420,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and January 1. Tamarisk Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38.548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest and related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020. Date Account Titles and Explanation Debit Credit 1/1/20 Cash 428400 Bonds Payable 420000 Premium on Bonds Payable 8400 7/1/20 Interest Expense Premium an Bonds Payable Cash 21000 12/31/20 Interest Expense Premium on Bands Payable Interest Payable 21000

Answer rating: 100% (QA)

Date Particulars Debit Credit a 01Jan20 Cash 420000 x 102100 428400 Premium on Bond... View the full answer