Business, 31.07.2020 19:01 paolacorazza

Paulson Company issues 6%, four-year bonds, on January 1 of this year, with a par value of $200,000 and semiannual interest payments. Semiannual Period-End Unamortized Discount Carrying Value
(0) January 1, issuance $13,466 $ 186,534
(1) June 30, first payment 11,782 188,218
(2) December 31, second payment 10,098 189,902

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Answer from: hjlhdjfhjh

Incomplete question.

the complete queston is

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

(a) The issuance of bonds on December 31, 2020.

b) The first interest payment on June 30, 2021.

find answer in explanation column.

Explanation:

Semiannual Period-End Unamortized Discount Carrying Value

(0) January 1, issuance $13,466 $ 186,534

(1) June 30, first payment 11,782 188,218

(2) December 31, second payment 10,098 189,902

1. to record issue of bonds payable

Date Account Debit Credit

Dec 31,2020Cash(carrying value) $ 186,534

Discount on bonds payable $13,466

Bonds payable $200,000

2. To record first interest payment

Date Account Debit Credit

june 30, 2021Interest expense $7,684

discount on bonds payable $1, 684

Cash $6,000

Calculation =

Cash paid towards interest every semi annual period = $200,000 X 6% X1/2 =$6,000.

interest expense = cash paid + discount on bonds payable written off.

= $6000 + $1, 684 = $7,684

discount on bonds payable = unamortised discount on 31 dec - unamortised discount on 30th june) ($13,466 -11,782 ==$1,684)

3.To record second interest payment on december 31,2021.

Date Account Debit Credit

Dec. 31 ,2021Interest expense $7,684

discount on bonds payable $1.684

Cash $6,000

Calculation

discount on bonds payable = unamortised discount on 30th june - unamortised discount on 31st december 2021 =11,782-10,098 = $1.684

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Answer from: Quest

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Paulson Company issues 6%, four-year bonds, on January 1 of this year, with a par value of $200,000...

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