Question
In: Accounting
Blossom Company issues $1,000,000, 10-year, 6% bonds at 92, with interest payable each January 1.
Brief Exercise 15-04 a-b
Blossom Company issues $1,000,000, 10-year, 6% bonds at 92, with interest payable each January 1.
Prepare the journal entry to record the sale of these bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date | Account Titles and Explanation | Debit | Credit |
Jan. 1 | |||
Assuming instead that the above bonds sold for 101, prepare the journal entry to record the sale of these bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date | Account Titles and Explanation | Debit | Credit |
Jan. 1 | |||
Solutions
Expert Solution
1) If bonds sold at $92
| Date | Account Titles and Explanation | Debit | Credit |
| Jan 01 | Cash | $920,000 | |
| Discount on Bonds Payable | $80,000 | ||
| Bonds Payable | $1,000,000 | ||
| (Being bonds sold at premium) |
2) If bonds sold at $101
| Date | Account Titles and Explanation | Debit | Credit |
| Jan 01 | Cash | $1,010,000 | |
| Premium on Bonds Payable | $10,000 | ||
| Bonds Payable | $1,000,000 | ||
| (Being bonds sold at Premium) |
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