Paulson Company issues 9%. four-year bonds, on December 31, 2015, with a par val
ID: 2495120 • Letter: P
Question
Paulson Company issues 9%. four-year bonds, on December 31, 2015, with a par value of $106,000 and semiannual interest payments. Use the above straight-line bond amortization table and prepare journal entries for the following. The issuance of bonds on December 31, 2015. The first interest payment on June 30. 2016. The second interest payment on December 31, 2016. Record the issue of bonds with a par value of $106,000 cash December 31, 2015. Record the interest payment and amortization on June 30, 2016. Record the interest payment and amortization on December 31, 2016.Explanation / Answer
Date Account Title Debit Credit $ $ December 31, 2015 Cash 106,000 Bonds Payable 106,000 June 30 2016 Interest expense 5,627 Discount on bonds payable 857 Cash 4,770 December 31 2016 Interest expense 5,627 Discount on bonds payable 857 Cash 4,770