Ask Question
25 July, 05:41

On June 30, 2012, Mackes Company issued $5,000,000 face value of 13%, 20-year bonds at $5,376,150, a yield of 12%. Mackes uses the effective interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.

Prepare the journal entries to record the following transactions.

a. The issuance of the bonds on June 30, 2012.

b. The payment of interest and the amortization of the premium on December 31, 2012.

c. The payment of interest and the amortization of the premium on June 30, 2013.

d. The payment of interest and the amortization of the premium on December 31, 2013.

+1
Answers (1)
  1. 25 July, 08:24
    0
    a. Dr Cash 5,376,150

    Cr Premium on bonds payable 376,150

    Cr Bonds payable 5,000,000

    b. Dr Interest expense 322,569

    Dr premium on bonds payable 2431

    Cr Cash 325,000

    c. Dr Interest expense 322,423

    Dr Premium on bonds payable 2577

    Cr Cash 325,000

    d. Dr Interest expense 322,269

    Dr premium on bonds payable 2731

    Cr Cash 325,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On June 30, 2012, Mackes Company issued $5,000,000 face value of 13%, 20-year bonds at $5,376,150, a yield of 12%. Mackes uses the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers