Please include the calculations Brief Exercise 14-7 On January 1, 2014, JWS Corp
ID: 2417759 • Letter: P
Question
Please include the calculations
Brief Exercise 14-7
On January 1, 2014, JWS Corporation issued $772,000 of 7% bonds, due in 8 years. The bonds were issued for $820,488 and the effective-interest rate is 6%.
Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Date
Account Titles and Explanation
Debit
Credit
January 1, 2014
July 1, 2014
December 31, 2014
No.
Date
Account Titles and Explanation
Debit
Credit
(a)January 1, 2014
(b)July 1, 2014
(c)December 31, 2014
Explanation / Answer
Working
Unamortised Premium on Bonds payable after july 1 = 48488-2405
Unamortised Premium on Bonds payable after july 1 = 46083
Net Book Value of Bonds Payable after July 1 = 772000+46083
Net Book Value of Bonds Payable after July 1 = 818083
No. Date Account Titles and Explanation Debit Credit (a) January 1, 2014 Cash 820488 Premium on Bonds Payable 48488 Bonds Payable 772000 (b) July 1, 2014 Interest Expenses (820488*6%*1/2) 24615 Premium on Bonds Payable (27020-24615) 2405 Cash (772000*7%*1/2) 27020 (c) December 31, 2014 Interest Expenses (818083*6%*1/2) 24542 Premium on Bonds Payable (27020-24542) 2478 Interest Payable (772000*7%*1/2) 27020