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Johnny's Hamburgers issued 9%, 10-year bonds payable at 85 on December 31, 2018. At December 31, 2020, Johnny reported the bonds payable as follows:
Johnny's Hamburgers issued 99%, 10-year bonds payable at 85 on December 31, 2018. December 31,
2020, Johnny eported the bonds payable as follows:
Long term liabilities:
Bonds Payable- $300,000
Less: Discount on Bonds Payable:(36,000) $264,000
1. Answer the following questions about Johnny's bonds payable:
| a. | What is the maturity value of the bonds? |
| b. | What is the carrying amount of the bonds at December 31, 2020? |
| c. | What is the semiannual cash interest payment on the bonds? |
| d. | How much interest expense should the company record each year? |
2.
Record the June 30, 2020,
semiannual interest payment and amortization of discount.
Answer & Explanation
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