Presented below is the partial bond discount amortization schedule for Osaki Cor
ID: 2377006 • Letter: P
Question
Presented below is the partial bond discount amortization schedule for Osaki Corp., which uses the effective interest method of amortization.
Interest Period
Interest
to Be Paid
Interest Expense to
Be Recorded
Discount Amortization
Unamortized Discount
Bond Carrying Value
Issue Date
$110,287
$1,216,713
1
$59,715
$60,836
$1,121
109,166
1,217,834
2
59,715
60,892
1,177
107,989
1,219,011
Prepare the journal entry to record the payment of interest and the discount amortization at the end of period 1.
Interest Period
Interest
to Be Paid
Interest Expense to
Be Recorded
Discount Amortization
Unamortized Discount
Bond Carrying Value
Issue Date
$110,287
$1,216,713
1
$59,715
$60,836
$1,121
109,166
1,217,834
2
59,715
60,892
1,177
107,989
1,219,011
Explanation / Answer
Debit: Bond Interest Expense 60,836 Credit: Cash 59,715 Credit: Discount on bonds payable 1,121