Answer:
Period Bonds Interest Cash Increase in Bonds payable
Payable Expenses Paid Bonds payable at the end
2018 583352 23334.08 18000 5334.08 588686.1
2019 588686.1 23547.44 18000 5547.44 594233.5
2020 594233.5 23766.48 18000 5766.48 600000
Journal entries
<u>Jan 01 2018</u>
Cash account Dr $583352
Discount on Bonds Payable Dr $16648
Bonds payable Cr $600000
<u>Dec 31 2018</u>
Interest expense Dr $23334.08
Cash account Cr $18000
Discount on bonds Payable Cr $5334.08
<u>Dec 31 2019</u>
Interest expense Dr $23547.44
Cash account Cr $18000
Discount on bonds Payable Cr $5547.44
<u>Dec 31 2020</u>
Interest expense Dr 23766.48
Cash account Cr $18000
Discount on bonds Payable Cr $5766.48
<u>Dec 31 2020</u>
Bonds Payable Dr $600000
Cash account Cr $600000
<u>01.01.2020</u> (Redemption at 101)
Bonds Payable Dr $600000
Loss on redemption of bonds Dr $11766.48
Cash account (600000*101%) Cr $606000
Discount on bonds payable Cr $5766.48