Entries for issuing bonds and amortizing premium by straightline method
Smiley Corporation wholesales repair products to equipment manufacturers. On April Y Smiley issued $ of year, bonds at a market effective interest rate of receiving cash of $ Interest is payable semiannually on April and October
a Journalize the entry to record the issuance of bonds on April Y If an amount box does not require an entry, leave it blank.
b Journalize the entry to record the first interest payment on October Y and amortization of bond premium for months, using the straightline method. Round to the nearest dollar. If an amount box does not require an entry, leave it blanir.
c Why was the company able to issue the bonds for $ rather than for the face amount of $
The market rate of interest is the contract rate of interest.
