Mellilo Corporation issued $5,300,000 of 20-year, 9.5 percent
bonds on July 1, 2009, at 98. Interest is due on June 30 and
December 31 of each year, and all of the bonds in the issue mature
on June 30, 2029. Mellilo's fiscal year ends on December 31.
Prepare the following journal entries:
|a.||July 1, 2009, to record the|
issuance of the bonds.
|b.||December 31, 2009, to pay|
interest and amortize the bond discount.
|c.||June 30, 2029, to pay interest,|
amortize the bond discount, and retire the bonds at maturity (make
two separate entries).
"$" sign in your response.)
|July 1|| (Click|
to select)Bonds Payable Interest Expense Accounts
PayableCashDiscount on Bonds Payable
to select)Discount on Bonds Payable Bonds Payable CashInterest
Expense Accounts Payable
select)Bond Interest ExpenseDiscount on Bonds PayableInterest
record issuance of bonds at 98.
|Dec. 31|| (Click|
to select)CashBond Interest ExpenseBonds PayableAmortization
ExpenseDiscount on Bonds Payable
select)Accounts PayableCashInterest Expense Discount on Bonds
Payable Bonds Payable
select)Interest Expense CashDiscount on Bonds Payable Bonds Payable
| To pay|
interest and amortize bond discount:
| Semiannual interest|
$ Af? 9A??1% Af? A??1
| Add discount|
[$ Af·20 yrs.] Af? A??1
|June 30|| (Click|
to select)Amortization ExpenseBond Interest ExpenseCashBonds
PayableDiscount on Bonds Payable
select)Discount on Bonds Payable CashBond Interest PayableAccounts
PayableBond Interest Expense
select)Bond Interest PayableCashAccounts PayableDiscount on Bonds
Payable Bond Interest Expense
| To make|
final interest payment and amortize bond discount.
(same calculation as in part b. above)
|June 30|| (Click|
to select)Bond PayableDiscount on Bonds PayableBond Interest
select)Bond PayableDiscount on Bonds PayableBond Interest
retire bonds at maturity.
This question was answered on: Dec 08, 2020
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