Answered

Discover the answers you need at Westonci.ca, where experts provide clear and concise information on various topics. Get detailed and precise answers to your questions from a dedicated community of experts on our Q&A platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

On January 1, 2021, Splash City issues $500,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year.


Assuming the market interest rate on the issue date is 8%, the bonds will issue at $549,482.

Sagot :

abiolataiwo2015

The entries to record the bond issue on January 1, 2021 is: Debit Cash $549,482; Credit Discount On bonds Payable $49,482; Credit Bonds Payable $500,000.

Journal entries

Splash city journal entries

January 1, 2021

Debit Cash $549,482

Credit Discount On bonds Payable $49,482

Credit Bonds Payable $500,000

(To record bond issue)

June 30, 2021

Debit Interest Expense  $21,979.28

(8%/2×$549,482)

Debit Discount on Bonds Payable $520.72

($22,500-$21,979.28)

Cash $22,500

(9%/2×$500,000)

(To record semiannual interest payments )

December 31, 2021

Debit Interest Expense  $21,979.28

(8%/2×$549,482)

Debit Discount on Bonds Payable $520.72

($22,500-$21,979.28)

Cash $22,500

(9%/2×$500,000)

(To record semiannual interest payments )

Therefore the entries to record the bond issue on January 1, 2021 is: Debit Cash $549,482; Credit Discount On bonds Payable $49,482; Credit Bonds Payable $500,000.

Learn more about journal entries here:https://brainly.com/question/14279491

https://brainly.com/question/15694291

#SPJ1

We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.