60.1K

Verified Solution

Link Copied!

Know the answers but not how to get them

On January 1 of this year, Victor Corporation sold bonds with a face value of $1,400,000 and a coupon rate of 8 percent. The bonds mature in four years and pay interest semiannually every June 30 and December 31. Victor uses the straight-line amortization method and also uses a premium account. Assume an annual market rate of interest of 6 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answers to whole dollars.) Required: 1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date General Journal Debit Credit 1 January 01 Cash 1,498,277 98,277 Premium on bonds payable Bonds payable 1,400,000 2. Prepare the journal entry to record the interest payment on June 30 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Date General Journal Debit Credit 1 June 30 Interest expense 43,715 Premium on bonds payable 12,285 Cash 56,000 3. What bonds payable amount will Victor report on its June 30 balance sheet? VICTOR CORPORATION Balance Sheet (Partial) At June 30 Long-term liabilities Bonds payable Premium on bonds payable $ 1,400,000 $ 85,991 $ 1,485,991

Answer & Explanation Solved by verified expert

See Answer