JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1	Jan. 1	Cash		1,008,960.00
2		Premium on Bonds Payable			58,960.00
3		Bonds Payable			950,000.00
4	Jun. 30	Interest Expense		18,427.00
5		Premium on Bonds Payable		2,948.00
6		Cash			21,375.00
7	Jul. 1	Cash		1,729,164.00
8		Discount on Bonds Payable		70,836.00
9		Bonds Payable			1,800,000.00
10	Oct. 1	Cash		1,100,000.00
11		Notes Payable			1,100,000.00
12	Dec. 31	Interest Expense		18,427.00
13		Premium on Bonds Payable		2,948.00
14		Cash			21,375.00
15	31	Interest Expense		16,500.00
16		Interest Payable			16,500.00
17	31	Interest Expense		37,403.00
18		Discount on Bonds Payable			5,903.00
19		Cash			31,500.00
20	31	Income Summary		90,757.00
21		Interest Expense			90,757.00

Review the journal entries on the SpringFit Corporation panel, then answer the questions below. 1. Assuming that no bonds had been issued prior to Year 1, how many different bonds appear in the journal entries for this year? 2 Correct 2. Which entry shows bonds issued at a contract rate lower than the market rate of interest? Choose the date. Jul. 1 Correct 3. How much interest was paid during the year on the bonds in (2) above? $31,500 4. What is the carrying amount of the bonds in (2) above at the end of the year? $1,735,067 5. Which entry shows bonds that sold for more than their face amount? Choose the date. Jan. 1 Correct 6. How much interest was paid during the year on the bonds in (5) above? $42,750 Correct 7. Assuming that straight-line amortization is used for the bonds in (5), what is the bond life? 10 years Correct 8. What is the carrying value of the bonds in (5) above at the end of the year? $ 9. Considering only the Year 1 journal entries, how much interest was probably accrued on the note payable issued during the year? $