Colman Company sold bonds with a tace value of $097.000 for $530 319 9. The bond
ID: 2536368 • Letter: C
Question
Colman Company sold bonds with a tace value of $097.000 for $530 319 9. The bonds have a coupon rate of 2 percent, mature in 9 years, and pay interest semiannually every June 30 arnd December 31 All of the bonds were sold on January 1 of this year. Using a discount account, record the sale of the bonds on January 1 and the payment of interest on June 30 of this effective-interest amortization method. Assume an annual market rate of interest of 10 percent. (If no entry is required for a transaction/event, select "No journal first account field. Round final answers to whole dollar amounts.) year. Coffman uses the View transaction list Journal entry worksheet 2 Record the sale of the bonds on January 1. No journal entry required Accounts payable Bonds payable Cash Discount on bonds payable Note: Enter debits befo Debit Credit Date January 01 View general journal Clear entry Record entryExplanation / Answer
Journal entry :
Date accounts & explanation debit credit Jan 1 Cash 530819 Discount on bonds payable 466181 Bonds payable 997000 (To record bonds payable) June 30 Interest expense (530819*10%*6/12) 26541 Discount on bonds payable 16571 Cash (997000*2%*6/12) 9970 (To record interest)