Question

Journalize the following Tyler Co. transactions. (Chart of Account : Cash, Bond Payable, Discount on Bond Payable, Premium on Bond Payable, Common
Stock, Paid-in Capital in Excess of Par, Treasury Stock, Interest Expense)

- Tyler Co. issued 1,000 shares of $20 par, common stock for $23,000
- Tyler Co. reacquired 300 shares of its common stock for $30 per share.
- Tyler Co. issued $60,000, 9%, 10-year bonds on Jan 1, 2018 for $56,261.(Interest is payable semiannually on July 1 and January 1. The price resulted in an effective interest rate of 10% on the bonds)
- The payment of interest and the amortization on July 1, 2018.
- Tyler Co. declared a two-for-one stock split.

Answer 1

	Account Titles	Debit	Credit
	Cash	$            23,000
	Common Stock		$           20,000
	Paid in capital in excess of par		$             3,000
	Treasury Stock	$              9,000
	Cash		$             9,000
Jan-01	Cash	$            56,261
	Discount on Bonds Payable	$              3,739
	Bonds Payable		$           60,000
Jul-01	Interest Expense	$              2,813
	Cash		$             2,700
	Discount on Bonds Payable		$                113
	No entry

Interest Expense = $56261 x 10% x 6/12 = $2813
Cash paid for interest = $60000 x 9% x 6/12 = $2700
Discount amortization = $2813-2700 = $113