On January 1, 2024, Splash City issues $450,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year.

Assuming the market interest rate on the issue date is 8%, the bonds will issue at $419,423.

• Record the bond issue.

• Date	General Journal	Debit	Credit
  January 01, 2024	Cash	419,423
  	Discount on Bonds Payable
  	Bonds Payable		450,000

• Record the first semiannual interest payment.

• Date	General Journal	Debit	Credit
  June 30, 2024	Interest Expense
  	Cash		15,750

• Record the second semiannual interest payment.

• Date	General Journal	Debit	Credit
  December 31, 2024	Interest Expense
  	Cash		15,750

Answer rating: 100% (QA)

1 Journal entry for bond issue Date Debit Credit January 12024 Cash 419423 Discount on bonds payable 30577 Bonds payable 450000 To record the issue of ... View the full answer