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# P11-6A Semi-Annual Interest Periods General Journal Date Jul Dec Jul Dec Accounts and Explanations 1 Cash Discount on Bonds Payable Bonds Payable (To...

P17-1 and p17-9

P11-6A Semi-Annual Interest to be Interst Expense Discount Unamortized Bond Carrying General Journal Interest Periods Paid to be Recorded Amortization Discount Value \$224,320 \$3,375,680 Date Accounts and Explanations Ref Debit Credit .45% x \$3,600,000 5% x \$3,375,680 M - K Q - O \$3,600,000 - Q Jul 1 Cash \$3,375,680 Discount on Bonds Payable \$224,320 1 \$162,000 \$168,784 \$6,784 \$217,536 \$3,382,464 Bonds Payable \$3,600,000 (To record sale of bonds at a discount) 2 \$162,000 \$169,123 \$7,123 \$210,413 \$3,389,587 Dec 31 Bond Interest Expense \$168,784 3 \$162,000 \$169,479 \$7,479 \$202,934 \$3,397,066 Bond Interest Payable \$6,784 Cash \$162,000 (To accrue bond interest and) amortization of bond discount) Jul 1 Bond Interest Expense \$169,123 Discount on Bonds Payable \$7,123 Cash \$162,000 (To record payment of bond interest and amortization of bond discount) Dec 31 Bond Interest Expense \$169,479 Discount on Bonds Payable \$7,479 Cash \$162,000 (To record payment of bond interest and amortization of bond discount) Total \$4,107,386 \$4,107,386
P11-7A General Journal S. Steigal Chemical Company Balance Sheet (Partial) Date Accounts and Explanations Ref Debit Credit Jul 1 Cash \$5,679,533 Longterm Liabilities: Bonds Payable \$5,000,000 Bonds Payable, 10%, payable in 2017 \$5,000,000.00 Premium on Bonds Payable \$679,533 Add: Premium on bonds payable \$608,302.00 \$5,608,302.00 (To record sale of bonds at a premium) Dec 31 Bond Interest Expense \$227,181 2007 Interest expense = \$451,588 Premium on Bonds Payable \$22,819 Cash \$250,000 (To record payment of bond interest and) The straight line method allocates the same amount of interest in each interest period. amortization of bond premium) If we had used straight line, the interest for 2007 would've been lower. Jul 1 Bond Interest Expense \$226,269 Premium on Bonds Payable \$23,731 Cash \$250,000 (To record payment of bond interest and amortization of bond discount) Dec 31 Bond Interest Expense \$225,319 Premium on Bonds Payable \$24,681 Cash \$250,000 (To record payment of bond interest and amortization of bond discount) Total \$6,429,533 \$6,429,533

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