Question

In: Accounting

What would I credit and debit for this question? Issued $86,000 of 8% bonds on December...

What would I credit and debit for this question? Issued $86,000 of 8% bonds on December 31, 2017, at 103. The bonds pay interest every June 30 and December 31.

Solutions

Expert Solution

Bonds are issued at 103.It means proceeds from the issuance of bond will be more than par value.So, cash is debited
and Bonds payable and premium on issuance of bonds are credited in this case.
Cash received 86000*103% = $       88,580
Bonds Payable $       86,000
Premium on issuance of bonds Payable $         2,580
Thus,
Cash is debited with $ 88,580 $       88,580
And
Bonds Payable is credited with $       86,000
and
Premium on issuance of bonds Payable is credited with. $         2,580

At each semi annual interest payment date, Interest Expense and Premium on bonds payable will be debited and Cash will be credited.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

What accounts do I credit and debit? On December 1, Photography issued 10,000 shares of common...
What accounts do I credit and debit? On December 1, Photography issued 10,000 shares of common stock to john in exchange for $40,000 cash On December 1, Photography purchased photography equipment for $7,560 cash On December 1, Photography prepaid $2,300 for the first 2 month's rent for their photography studio. The company's policy is to initially record prepaid expenses and unearned revenues in balance sheet accounts On December 4, Photography received a $4,200 deposit (partial payment) from john for their...
What would be the correct Debit Account and Credit Account for the following? Pay cash for...
What would be the correct Debit Account and Credit Account for the following? Pay cash for delivery van: Covert a Long-term liability into common stock Declared a cash dividend Paid Cash Dividends Received cash for services performed Pay off Short-term liability Purchase office equipment, giving a percentage promissory note Disbursed Salaries and Wages Invest Cash in Exchange for Common stock Purchased equipment by signing a 3-month 12%, note payable Receives cash in advance for service TO BE Performed Pays Rent...
Suppose that there are 8 blue credit cards, 6 red credit cards and 4 blue debit...
Suppose that there are 8 blue credit cards, 6 red credit cards and 4 blue debit cards in a box. It is known that color and card type are to be independent when a card is selected at random from this box. a) How many red debit cards must be present? b) Suppose that, 6 cards are randomly selected in a row with replacement. What is the probability that 2 blue credit cards and 2 blue debit cards are selected?...
What would be the journal entry for the following transactions (include account, amount, debit or credit):...
What would be the journal entry for the following transactions (include account, amount, debit or credit): Jan 7 Issued common stock for $50,000 Feb 14 Purchased supplies on account for $3,750 Feb 20 Paid the invoice for Supplies that were purchased on Feb 14th Apr 3 Issued additional common stock for $30,000. Apr 8 Purchased merchandise of 6,000 yo-yos at $2.00 per yo-yo on account, terms 1/10, n/30. May 8 Paid the invoice of April 8 May 11   Sold 2,000...
What is a debit? What is a credit? What is the fundamental accounting equation?
  What is a debit? What is a credit? What is the fundamental accounting equation?
Bonds Issued at a Discount (Effective Interest) Sicily Corporation issued $1,000,000 in 8% bonds (payable on...
Bonds Issued at a Discount (Effective Interest) Sicily Corporation issued $1,000,000 in 8% bonds (payable on December 31, 2029) on January 1, 2020, for $940,000. Interest is paid on June 30 and December 31. The market rate of interest is 11%. Required: Prepare the amortization table through December 31, 2021, using the effective interest rate method. If an amount box does not require an entry, leave it blank and if the answer is zero, enter "0". If required, round your...
Question 3 A company issued 8%, 15-year bonds with a par value of $470,000 that pay...
Question 3 A company issued 8%, 15-year bonds with a par value of $470,000 that pay interest semiannually. The market rate on the date of issuance was 8%. The journal entry to record each semiannual interest payment is: Multiple Choice Debit Bond Interest Expense $37,600; credit Cash $37,600. Debit Bond Interest Expense $18,800; credit Cash $18,800. Debit Bond Interest Payable $31,333; credit Cash $31,333. No entry is needed, since no interest is paid until the bond is due. Debit Bond...
The unadjusted trial balance of Marin Inc. at December 31, 2017, is as follows: Debit Credit...
The unadjusted trial balance of Marin Inc. at December 31, 2017, is as follows: Debit Credit Cash $17,340 Accounts Receivable 106,100 Allowance for Doubtful Accounts $3,670 Inventory 61,700 Prepaid Insurance 4,599 Bond Investment at Amortized Cost 50,400 Land 28,100 Buildings 152,700 Accumulated Depreciation—Buildings 6,045 Equipment 34,800 Accumulated Depreciation—Equipment 5,800 Goodwill 16,750 Accounts Payable 101,100 Bonds Payable (20-year, 7%) 168,000 Common Shares 120,500 Retained Earnings 61,184 Sales Revenue 190,500 Rent Revenue 11,100 Advertising Expense 23,100 Supplies Expense 10,600 Purchases 97,900 Purchase...
The adjusted trial balance for Chiara Company as of December 31 follows. Debit Credit Cash $...
The adjusted trial balance for Chiara Company as of December 31 follows. Debit Credit Cash $ 265,100 Accounts receivable 51,000 Interest receivable 23,200 Notes receivable (due in 90 days) 173,000 Office supplies 15,500 Automobiles 173,000 Accumulated depreciation—Automobiles $ 55,000 Equipment 140,000 Accumulated depreciation—Equipment 28,000 Land 84,000 Accounts payable 97,000 Interest payable 50,000 Salaries payable 22,000 Unearned fees 34,000 Long-term notes payable 154,000 Common stock 35,580 Retained earnings 320,220 Dividends 53,000 Fees earned 584,000 Interest earned 32,000 Depreciation expense—Automobiles 27,500 Depreciation...
The adjusted trial balance for Chiara Company as of December 31 follows. Debit Credit Cash $...
The adjusted trial balance for Chiara Company as of December 31 follows. Debit Credit Cash $ 157,200 Accounts receivable 51,500 Interest receivable 18,600 Notes receivable (due in 90 days) 171,500 Office supplies 16,000 Automobiles 168,000 Accumulated depreciation—Automobiles $ 55,000 Equipment 140,000 Accumulated depreciation—Equipment 27,000 Land 81,000 Accounts payable 96,000 Interest payable 25,000 Salaries payable 26,000 Unearned fees 36,000 Long-term notes payable 154,000 Common stock 27,580 Retained earnings 248,220 Dividends 53,000 Fees earned 574,000 Interest earned 28,000 Depreciation expense—Automobiles 27,000 Depreciation...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT