Blossom Company has issued three different bonds during 2019. Interest is payabl

Question

Blossom Company has issued three different bonds during 2019. Interest is payable annually on each of these bonds. 1. On January 1, 2019, 1,500, 8%, 5-year, $1,500 bonds dated January 1, 2019, were issued at face value. 2. On July 1, $818,000, 9%, 5-year bonds dated July 1, 2019, were issued at 102. 3. On September 1, $357,000, 7%, 5-year bonds dated September 1, 2019, were issued at 98.

Brief Exercise 10-12 Blossom Company has issued three different bonds during 2019. Interest is payable annually on each of these bonds. I. On January 1, 2019, 1,500, 8%, 5-year, $1,500 bonds dated January 1, 2019, were issued at face value. 2. On July 1, $818,000, 996, 5-year bonds dated July 1, 2019, were issued at 102. 3. On September 1, $357,000, 7%, 5-year bonds dated September 1, 2019, were issued at 98. Prepare the journal entries to record each bond transaction at the date of issuance. (Credit account titles are autom No. Date Account Titles and Explanation Debit Credit 1. Jan. 1 ' Cash 2250000 Bonds Payable 2250000 2. July 1 ' Cash Premium on Bonds Payable Bonds Payable 3. Sept. 1 Cash Discount on Bonds Payable Bonds Payable

Explanation / Answer

1 1-Jan Cash 2250000 Bond payable 2250000 2 01-Jul Cash 834360 =818000/100*102 Premium 16360 =834360-818000 Bond payable 818000 3 01-Sep Cash 349860 =357000/100*98 Discount on Bonds Payable 7140 =357000-349860 Bonds payable 357000

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