Crane Company issues $3.30 million, 10-year, 9% bonds at 96, with interest payab

Question

Crane Company issues $3.30 million, 10-year, 9% bonds at 96, with interest payable on December 31. The straight-line method is used to amortize bond discount.

Prepare the journal entry to record interest expense and bond discount amortization on December 31, 2017, assuming no previous accrual of interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Your answer is partially correct. Try again. Prepare the journal entry to record interest expense and bond discount amortization on December 31, 2017, assuming no previous accrual of interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Interest Expense 382800 396000 Discount on Bonds Payable 13200

Explanation / Answer

Journal entry

Date accounts Title and explanation debit credit Dec 31 Interest expense 310200      Cash (3300000*9%) 297000      Discount on bonds payable (132000/10) 13200

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