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Brief Exercise 14-7 On January 1, 2017, Sweet Corporation issued $480,000 of 7% bonds, due in...

Brief Exercise 14-7 On January 1, 2017, Sweet Corporation issued $480,000 of 7% bonds, due in 10 years. The bonds were issued for $515,707, and pay interest each July 1 and January 1. The effective-interest rate is 6%.

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Answer #1
1-Jan Cash 515707
       Bonds payable 480000
      Premium on Bonds payable 35707
1-Jul Interest Expense 15471 =515707*6%/2
Premium on Bonds payable 1329
       Cash 16800 =480000*7%/2
31-Dec Interest Expense 15431 =(515707-1329)*6%/2
Premium on Bonds payable 1369
       Interest Payable 16800
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