Question

1a. On January 1, 2021, Julee Enterprises borrows $34,000 to purchase a new Toyota Highlander by agreeing to a 5%, 4-year note with the bank. Payments of $783.00 are due at the end of each month with the first installment due on January 31, 2021.

Record the issuance of the note payable and the first two monthly payments. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)

1b.

Presented below is a partial amortization schedule for Discount Foods:

				Interest			Increase in			Carrying
Period	Cash Paid			Expense			Carrying Value			Value
Issue Date										$	74,600
1	$	2,400		$	2,984		$	584			75,184
2		2,400			3,007			607			75,791

Required:
1. & 2.Record the bond issue assuming the face value of bonds payable is $90,000 and first interest payment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

1c.

Presented below is a partial amortization schedule for Premium Foods:

				Interest			Increase in			Carrying
Period	Cash Paid			Expense			Carrying Value			Value
Issue Date										$	85,940
1	$	4,000		$	3,438		$	562			85,378
2		4,000			3,415			585			84,793

Required:
1. & 2.Record the bond issue assuming the face value of bonds payable is $76,000 and first interest payment. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

		Debit	Credit
1a)	Car Debit	$              34,000
	Note Payable Credit		$              34,000
	To record issuance of note payable
	Interest Expense Debit	$              141.67		=34000*5%/12
	Note Payable Debit	$              641.33		=783-641.33
	Cash Credit		$              783.00
	To record 1st monthly payment
	Interest Expense Debit	$              138.99		=(34000-641.33)*5%/12
	Note Payable Debit	$              644.01
	Cash Credit		$              783.00
	To record 2nd monthly payment
1B)	Cash	$              74,600
	Discount on issue of bond	$              15,400
	Bond Payable		$              90,000
	To record issuance of bond
	Interest Expense Debit	$          2,984.00
	Discount on issue of bond		$              584.00
	Cash Credit		$          2,400.00
	To record 1st monthly payment
1c)	Cash	$              85,940
	Premium on issue of bond		$                9,940
	Bond Payable		$              76,000
	To record issuance of bond
	Interest Expense Debit	$          3,438.00
	Premium on issue of bond	$              562.00
	Cash Credit		$          4,000.00
	To record 1st monthly payment