For calculation of the following entries, the bond interest expense will gotten by multiplying the carrying bond value by the market interest rate.
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<h3>Journal entry to record issuance of the bonds</h3>
Date Account titles Debit Credit
Jan. 1. Cash $407,968
Bonds payable $380,000
Premium on bonds payable $27,968
($407,968 - $380,000)
<h3>Journal entry to record accrual of interest and the premium amortization</h3>
Date Account titles Debit Credit
Dec. 31. Bond interest expense $24,478
Premium bond payable $2,122
Bond interest payable $26,600
<h3>Journal entry to record payment of interest </h3>
Date Account titles Debit Credit
Jan. 1. Bond interest payable $26,600
($380000 * 7%)
Cash $26,600
Missing words "<em>Prepare journal entries to record (a) The issuance of the bonds, (b) The accrual of interest and the premium amortization on December 31, 2022 and (c) The payment of interest on January 1, 2022"</em>
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