Paris Electric sold $4,400,000, 606, 10-year bonds on January 1, 2017, The bonds

Question

Paris Electric sold $4,400,000, 606, 10-year bonds on January 1, 2017, The bonds were dated January 1 and pay interest annually on January 1. Paris Electric uses the straight-line method to amortize bond premium or discount. The bonds were sold at 101 Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Exolanation Debit Credit Jan. 1, 2017 Prepare a bond premium amortization schedule for the first 4 interest periods. Annual Interest Periods Interest to Be Paid Interest Expense to Be Premium Unamortized Bond Carrying Amortization Premium Value Recorded Issue date 4

Explanation / Answer

Part 1

Part 2

264000

(4400000*6%)

4400

(44000/10)

4439600

(4444000-4400)

4435200

(4439600-4400)

4430800

(4435200-4400)

4426400

(4430800-4400)

Part 3

Part 4

Paris Electric

Balance sheet

December 31 2018

Date account titles and explanation debit credit January 1 2017 cash (4400000*1.01) 444,4000 Premium on bonds payable 44000 Bonds payable 4400000

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