Question
The Bryan Company issued $500,000 of 10% face valuebonds on January 1, 2007 for $486,000. The bonds are dueDecember 31, 2009, and pay interest semiannually on June 30 andDecember 31. The company uses the straight-line ammortizationmethod. Prepare the journal entrie to record the issuance of the bondsand the first two interest payments. The Bryan Company issued $500,000 of 10% face valuebonds on January 1, 2007 for $486,000. The bonds are dueDecember 31, 2009, and pay interest semiannually on June 30 andDecember 31. The company uses the straight-line ammortizationmethod. Prepare the journal entrie to record the issuance of the bondsand the first two interest payments.
Explanation / Answer
2007 Debit Credit January,1 Bank $486,000 Discounton BondPayable $14,000 BondsPayable $500,000 2007 June,30 BondInterestExpense $25,000 Bank $25,000 2007 December, 31 Bond InterestExpense $25,000 Bank $25,000 2007 December, 31 Bond InterestExpense $25,000 Bank $25,000