Question

On January 1, 2017, Ultra Vision Corp. issued $1,290,000 of 20-year 8.0% bonds that pay interest...

On January 1, 2017, Ultra Vision Corp. issued $1,290,000 of 20-year 8.0% bonds that pay interest semiannually on June 30 and December 31. Assume the bonds were sold at (1) 98; and (2) 102. Journalize the issuance of the bonds at 98 and 102. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar.)

  • 1
    Record the sold bonds at a discount.
  • 2
    Record the sold bonds at a premium.

Homework Answers

Answer #1
Journal Entries
1) Bonds sold at discount
Accounting titles & discount Debit Credit
Cash (1,290,000*.98) 1264200
Discount on bonds payable 25800
Bonds payable 1,290,000
2) Bonds sold at premium
Accounting titles & discount Debit Credit
Cash (1,290,000*1.02) 1315800
Premium on bonds payable 25800
Bonds payable 1,290,000
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