First interest payment journal entry
|
Transaction
date |
Description |
Debit |
Credit |
|
|
|
Jun-30 |
Bond interest expense |
$
15,967 |
|
|
|
Premium on bond |
$
1,583 |
|
|
|
Cash |
|
$
17,550 |
|
|
(Interest on bond paid and Discount amortized) |
|
|
Alternate entry assuming bond premium is amortized yearly
|
Transaction
date |
Description |
Debit |
Credit |
|
|
|
Jun-30 |
Bond interest expense |
$
17,550 |
|
|
|
Cash |
|
$
17,550 |
|
|
(Interest on bond paid and Discount amortized) |
|
|
Working
|
Bond issue price (2000000/100*96)) |
$ 4,05,830.00 |
|
Face value |
$ 3,90,000.00 |
|
Premium on bond |
$ 15,830.00 |
|
Number of Interest payments (5 years x 2) |
10 |
|
Discount to be amortized per year |
$
1,583.00 |
|
Interest on bond semiannually |
$ 17,550.00 |
