In each of the following independent cases, the company closes its books on December 31. Partially correct answer. Your answer is partially correct. Try again. Pina Co. sells $532,000 of 8% bonds on March 1, 2020. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2023. The bonds yield 12%. Give entries through December 31, 2021. Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made. Schedule of Bond Discount Amortization Effective-Interest Method
Bonds Sold to Yield
datecash paidinterest expensediscount amortizedcarrying amount of bonds
3/1/20
9/1/20
3/1/21
9/1/21
3/1/22
9/1/22
3/1/23
9/1/23
Prepare all of the relevant journal entries from the time of sale until December 31, 2021. (Assume that no reversing entries were made.)
3/1/20
cash
discount on bonds payable
bonds payable
9/1/20
interest expense
discounts on bonds payable
cash
12/31/20
interest expense
interest payable
discount on bonds payable
3/1/21
interest payable
interest expense
cash
discounts on bonds payable
9/1/21
interest expense
cash
discounts on bonds payable
12/31/21
interest expense
interest payable
discounts on bonds payable