Question

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

Answer 1

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)