CSecure https://edugen.wileyplus.com/ed Kimmel, Financial Accounting, 8e CALCULA
ID: 2532865 • Letter: C
Question
CSecure https://edugen.wileyplus.com/ed Kimmel, Financial Accounting, 8e CALCULATOR PRINTER VERSION BACK NEXT ASSIGNMENT RESOURCES Question 1 On January 1, 2017, Culver Company issued $1,980,000 face value, 996, 10-year bonds at $2,112,858. This price resulted in a 8% effective-interest rate on the bonds. Culver uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1 Question 2 ? (a) Prepare the journal entries to record the following transactions. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 1. The issuance of the bonds on January 1, 2017 2. Accrual of interest and amortization of the premium on December 31, 2017 3. The payment of interest on January 1, 2018 4. Accrual of interest and amortization of the premium on December 31, 2018. Question No. Date Account Titles and Explanation Credit 1. Jan 1, 2017 ??uestion is Question 12 2. Dec. 31, 2017 Question 1 3. Jan. 1, 2018 4. Dec. 31, 2018 7-20 PM O Type here to search rP ^ dx ? 4/27/20183Explanation / Answer
Journal entry :
Date accounts & explanation debit credit Jan 1,2017 Cash 2112858 Bonds payable 1980000 Premium on bonds payable 132858 (To record issue bonds payable) Dec 31, 2017 Interest expense (2112858*8%) 169029 Premium on bonds payable 9171 Interest payable (1980000*9%) 178200 (To record accured interest) Jan 1,2018 Interest payable 178200 Cash 178200 (To record interest paid) Dec 31,2018 Interest expense (2112858-9171)*8% 168295 Premium on bonds payable 9905 Interest payable 178200 (To record accured interest)