Dobbs Company issues 9%, two-year bonds, on December 31, 2018, with a par value of $104,000...

Dobbs Company issues 9%, two-year bonds, on December 31, 2018, with a par value of $104,000 and semiannual interest payments.

Semiannual Period-End		Unamortized Discount		Carrying Value
(0)	12/31/2018	$	6,080	$	97,920
(1)	6/30/2019		4,560		99,440
(2)	12/31/2019		3,040		100,960
(3)	6/30/2020		1,520		102,480
(4)	12/31/2020		0		104,000

Use the above straight-line bond amortization table and prepare journal entries for the following.

Required:
(a) The issuance of bonds on December 31, 2018.
(b) The first through fourth interest payments on each June 30 and December 31.
(c) The maturity of the bonds on December 31, 2020.

Solutions

Expert Solution

a
December 31, 2018	Cash	97920
	Discount on bonds payable	6080
	Bonds payable		104000

b
June 30,2019	Bond interest expense	6200
	Discount on bonds payable		1520	=6080-4560
	Cash		4680	=1040009%6/12

December 31, 2019	Bond interest expense	6200
	Discount on bonds payable		1520	=4560-3040
	Cash		4680

June 30,2020	Bond interest expense	6200
	Discount on bonds payable		1520	=3040-1520
	Cash		4680

December 31, 2020	Bond interest expense	6200
	Discount on bonds payable		1520
	Cash		4680

c
December 31, 2020	Bonds payable	104000
	Cash		104000

ekkarill92 answered 1 year ago

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