Question

Brief Exercise 10-18 Presented below is the partial bond discount amortization schedule for Whispering Winds Corp., which uses the effective-interest method of amortization. Interest PeriodsInterest to Be PaidInterest Expense to Be Recorded Discount Amortization Unamortized Discount Bond Carrying Value Issue date$67,991$1,350,009 1$70,900$74,250$3,35064,6411,353,359 270,90074,4353,53561,1061,356,894 (a) Prepare the journal entry to record the payment of interest and the discount amortization at the end of period 1.

Answer 1

Answer:

interest expense 74,250 debit

    discount on bonds payable       3,350 credit

    cash                                            70,900 credit

Explanation:

Adjustment to a better display of the data:

Paid  Expense Amortization Unarmotized Carrying Value

Issue Date     67,991‬      1,356,709

1 70,900 74,250 3,350 64,641 1,353,359

2 70,900 74,435 3,535 61,106 1,349,824

To record the payment of interest and discount we will debit the interst expense

and credit the cash given along with the discount on Bonds Payble for the difference