On July Y Danzer Industries Inc. issued $ of year, bonds at a market effective interest rate of receiving cash of $ Interest on the bonds is payable semiannually on December and June The fiscal year of the company is the calendar year.
Required:
Journalize the entry to record the amount of cash proceeds from the issuance of the bonds.
Journalize the entries to record the following:
a The first semiannual interest payment on December Y and the amortization of the bond discount, using the interest method.
b The interest payment on June Y and the amortization of the bond discount, using the interest method.
Determine the total interest expense for Yb The interest payment on June Year and the amortization of the bond discount, using the straightline method.
Answer:
Date
Account titles and explanation
Debit
Credit
June Y
Intererst Expense
Discount on Bonds Payable
Cash
To record interest payment and amortization of discount entry b is wrong
