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Bonds Issued at a Premium
Bunkichi Corporation issued the following bonds at a premium:
| Date of issue and sale: | March 1, 20-1 |
| Principal amount: | $900,000 |
| Sale price of bonds: | 103 |
| Denomination of bonds: | $1,000 |
| Life of bonds: | 10 years |
| Stated rate: | 9%, payable semiannually on August 31 and February 28 |
Required:
1 . Prepare journal entries for the activities listed below. If required, round your answers to two decimal places.
(a) Issuance of the bonds at a premium.
Page: | | DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | DEBIT | CREDIT | |
| 1 | 20-1 Mar. 1 | | | | fill in the blank 5c0fbbff8063fa1_2 | fill in the blank 5c0fbbff8063fa1_3 | 1 |
| 2 | | | | | fill in the blank 5c0fbbff8063fa1_5 | fill in the blank 5c0fbbff8063fa1_6 | 2 |
| 3 | | | | | fill in the blank 5c0fbbff8063fa1_8 | fill in the blank 5c0fbbff8063fa1_9 | 3 |
(b) Interest payment and premium amortization on the bonds on August 31, 20-1.
Page: | | DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | DEBIT | CREDIT | |
| 1 | 20-1 Aug. 31 | | | | fill in the blank b78f7c068fe3fe1_2 | fill in the blank b78f7c068fe3fe1_3 | 1 |
| 2 | | | | | fill in the blank b78f7c068fe3fe1_5 | fill in the blank b78f7c068fe3fe1_6 | 2 |
| 3 | | | | | fill in the blank b78f7c068fe3fe1_8 | fill in the blank b78f7c068fe3fe1_9 | 3 |
(c) Year-end adjustment on the bonds for 20-1.
Page: | | DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | DEBIT | CREDIT | |
| 1 | 20-1 Dec. 31 | | | | fill in the blank 9d0e25fe9f8afd7_2 | fill in the blank 9d0e25fe9f8afd7_3 | 1 |
| 2 | | | | | fill in the blank 9d0e25fe9f8afd7_5 | fill in the blank 9d0e25fe9f8afd7_6 | 2 |
| 3 | | | | | fill in the blank 9d0e25fe9f8afd7_8 | fill in the blank 9d0e25fe9f8afd7_9 | 3 |
(d) Reversing entry for the beginning of 20-2.
Page: | | DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | DEBIT | CREDIT | |
| 1 | 20-2 Jan. 1 | | | | fill in the blank eff9d604dfdf075_2 | fill in the blank eff9d604dfdf075_3 | 1 |
| 2 | | | | | fill in the blank eff9d604dfdf075_5 | fill in the blank eff9d604dfdf075_6 | 2 |
| 3 | | | | | fill in the blank eff9d604dfdf075_8 | fill in the blank eff9d604dfdf075_9 | 3 |
(e) Interest payments and premium amortization on the bonds for 20-2 (February 28 and August 31).
Page: | | DATE | ACCOUNT TITLE | DOC. NO. | POST. REF. | DEBIT | CREDIT | |
| 1 | 20-2 Feb. 28 | | | | fill in the blank d54581fe2ffbfed_2 | fill in the blank d54581fe2ffbfed_3 | 1 |
| 2 | | | | | fill in the blank d54581fe2ffbfed_5 | fill in the blank d54581fe2ffbfed_6 | 2 |
| 3 | | | | | fill in the blank d54581fe2ffbfed_8 | fill in the blank d54581fe2ffbfed_9 | 3 |
| 4 | | | | | | | 4 |
| 5 | Aug. 31 | | | | fill in the blank d54581fe2ffbfed_11 | fill in the blank d54581fe2ffbfed_12 | 5 |
| 6 | | | | | fill in the blank d54581fe2ffbfed_14 | fill in the blank d54581fe2ffbfed_15 | 6 |
| 7 | | | | | fill in the blank d54581fe2ffbfed_17 | fill in the blank d54581fe2ffbfed_18 | 7 |
2 . Calculate the carrying value of the bonds on August 31, 20-2.
$fill in the blank b504ee03c000023_1
3. Prepare the bonds payable section of a partial balance sheet as of August 31, 20-2.
| Bunkichi Corporation |
| Balance Sheet (Partial) |
| August 31, 20-2 |
| Long-term liabilities: | | |
| | $fill in the blank 65b5ce004ff3055_2 | |
| | fill in the blank 65b5ce004ff3055_4 | $fill in the blank 65b5ce004ff3055_5 |
Answer & Explanation
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