Cullumber Electric sold 3,950,000, 12%, 10-year bonds on January 1, 2020. The bonds were dated January...

Transcribed Image Text:

Cullumber Electric sold €3,950,000, 12%, 10-year bonds on January 1, 2020. The bonds were dated January 1 and pay interest annually on January 1. Cullumber Electric uses the straight-line method to amortize bond premium or discount. The bonds were sold at 101. Prepare the journal entry to record the issuance of the bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Jan. 1, 2020 Prepare a bond premium amortization schedule for the first 4 interest periods. Annual Interest Periods Issue date 1 2 3 4 (A) Interest to Be Paid (10%* €3,00,000) 300000 300000 300000 300000 (B) Interest Expense to Be Recorded (A)-(C) € 3950 3950 3950 3950 Debit € (C) Premium Amortization. (€120,000*10%) Credit (D) Bond Carrying Val Prepare the journal entries for interest and the amortization of the premium in 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date: 0 O Account Titles and Explanation Current Liabilities Cullumber Electric Statement of Financial Position (Partial) Show the statement of financial position presentation of the bond liability at December 31, 2021. (Enter account name only and do not provide descriptive information.) 0 O Debit € Credit 10000 Cullumber Electric sold €3,950,000, 12%, 10-year bonds on January 1, 2020. The bonds were dated January 1 and pay interest annually on January 1. Cullumber Electric uses the straight-line method to amortize bond premium or discount. The bonds were sold at 101. Prepare the journal entry to record the issuance of the bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Jan. 1, 2020 Prepare a bond premium amortization schedule for the first 4 interest periods. Annual Interest Periods Issue date 1 2 3 4 (A) Interest to Be Paid (10%* €3,00,000) 300000 300000 300000 300000 (B) Interest Expense to Be Recorded (A)-(C) € 3950 3950 3950 3950 Debit € (C) Premium Amortization. (€120,000*10%) Credit (D) Bond Carrying Val Prepare the journal entries for interest and the amortization of the premium in 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date: 0 O Account Titles and Explanation Current Liabilities Cullumber Electric Statement of Financial Position (Partial) Show the statement of financial position presentation of the bond liability at December 31, 2021. (Enter account name only and do not provide descriptive information.) 0 O Debit € Credit 10000

Answer rating: 100% (QA)

Answer Journal entry to record the issuance of bonds Year 2020 Jan01 Cash 3300000104 Bond Premium am... View the full answer