Use the following information for Cornerstone Exercises 9-30 and 9-31: On Decemb
ID: 2462003 • Letter: U
Question
Use the following information for Cornerstone Exercises 9-30 and 9-31: On December 31, 2011, Drew Company issued $350,000, five-year bonds for $320,000. The stated rate of interest was 7 percent and interest is paid annually on December 31. Refer to the information for Drew Company above. Required: Prepare the necessary journal entry on December 31, 2013, assuming the straight line method is followed. Refer to the information for Drew Company above. Required: Prepare the amortization table for Drew Company's bonds.Explanation / Answer
Answer:9-30
31 Dec 2011
Cash A/C Dr. $320000
Discount on issue of bonds A/C Dr. $30000
To Bonds Payable A/C $350000
31 dec 2012
31 dec 2013
Interest expense A/C dr. $28400
To interest payable A/C $22400
To discount on bonds payable A/C $6000
Answer:9-31
Interest Expense 28400 Interest Payable 22400 Bond Discount 6000