Question

The Splish Company issued $210,000 of 9% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds were issued at 96.

Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Splish Company records straight-line amortization semiannually. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.)

Answer 1

Journal entries (2017)					Journal entries (2018)
Date	Account Titles	Debit	Credit		Date	Account Titles	Debit	Credit
Jan.1,2017	Cash	$201,600.00			Jan.1,2018	Interest Payable	$9,450.00
	Discount on Bonds Payable	$8,400.00				Cash		$9,450.00
	Bonds Payable		$210,000.00
July.1,2017	Interest Expense	$10,290.00			July.1,2018	Interest Expense	$10,290.00
	Discount on Bonds Payable		$840.00			Discount on Bonds Payable		$840.00
	Cash		$9,450.00			Cash		$9,450.00
Dec.31,2017	Interest Expense	$10,290.00			Dec.31,2018	Interest Expense	$10,290.00
	Discount on Bonds Payable		$840.00			Discount on Bonds Payable		$840.00
	Interest Payable		$9,450.00			Interest Payable		$9,450.00
Journal entries (2019)					Journal entries (2020)
Date	Account Titles	Debit	Credit		Date	Account Titles	Debit	Credit
Jan.1,2019	Interest Payable	$9,450.00			Jan.1,2020	Interest Payable	$9,450.00
	Cash		$9,450.00			Cash		$9,450.00
July.1,2019	Interest Expense	$10,290.00			July.1,2020	Interest Expense	$10,290.00
	Discount on Bonds Payable		$840.00			Discount on Bonds Payable		$840.00
	Cash		$9,450.00			Cash		$9,450.00
Dec.31,2019	Interest Expense	$10,290.00			Dec.31,2020	Interest Expense	$10,290.00
	Discount on Bonds Payable		$840.00			Discount on Bonds Payable		$840.00
	Interest Payable		$9,450.00			Interest Payable		$9,450.00
Journal entries (2021)					Journal entries (2022)
Date	Account Titles	Debit	Credit		Date	Account Titles	Debit	Credit
Jan.1,2021	Interest Payable	$9,450.00			Jan.1,2022	Interest Payable	$9,450.00
	Cash		$9,450.00			Cash		$9,450.00
July.1,2021	Interest Expense	$10,290.00			Jan.1,2022	Bond Payable	$210,000.00
	Discount on Bonds Payable		$840.00			Cash		$210,000.00
	Cash		$9,450.00
Dec.31,2021	Interest Expense	$10,290.00
	Discount on Bonds Payable		$840.00
	Interest Payable		$9,450.00
Straight line amortization of discount on bonds payable = Discount on bonds Payable / No.of semi annual periods
Straight line amortization of discount on bonds payable = $8400 / 10 periods = $840