Question

Woodwick Company issues 9%, five-year bonds, on December 31, 2014, with a par value of $96,000 and semi-annual interest payments.Semi-annual Period-End Unmortized Premium Carrying value 0) 12/31/2816 $8,031 $104,0311) 6/3e/2817 7,228 183,2282) 12/31/2817 6,425 182,425 Use the above straight-line bond amortization table and prepare journal entries for the following A) The issuance of bonds on December 31, 2016.B) The first interest payment on June 30, 2017.C) The second interest payment on December 31, 2017.

Answer 1

Answer:

A) The issuance of bonds on December 31, 2016.

Dr Cash 104,031

    Cr Bonds payable 96,000

    Cr Premium on bonds payable 8,031

B) The first interest payment on June 30, 2017.

Dr Interest expense 3,517

Dr Premium on bonds payable 803

    Cr Cash 4,320

C) The second interest payment on December 31, 2017.

Dr Interest expense 3,517

Dr Premium on bonds payable 803

    Cr Cash 4,320