Question

on january 1st, year 1, a company issues $310,000 of 9% bonds, due in 20 years, with interest payable semiannually on june 30 and December 31 each year. Assuming the market interest rate on the issue date is 10%, the bonds will issue at $283,405.

I need the answers for 1/1 year 1 carrying value:

6/30/year 1: ___________ cash paid, _____________ interest expense, _________________ change in carrying value, _________________ carrying value

12/31/year 1: ___________ cash paid, _______________ interest expense, _____________ change in carrying value, _____________ carrying value.

Then same question:

I need the journal entries for:

January 1st. requires the "Record the bond issue"

June 30th requires: the " Record the first semiannual interest payment"

December 31: requires the " Record the second semiannual interest payment."

Answer 1

1	Date	Cash Paid	Interest Expense	Change in Carrying Value	Carrying Value
					$283,405
	6/30/year 1	$13,950	$14,170	$220	$283,625
	12/31/year 1	$13,950	$14,181	$231	$283,857
2
	Date	Accounts	Debit	Credit
	Jan 1	Cash	$283,405
		Discount on Bonds Payable	$26,595
		Bonds Payable		$310,000
	June 30	Interest Expense	$14,170
		Discount on Bonds Payable		$220
		Cash		$13,950
	Dec 31	Interest Expense	$14,181
		Discount on Bonds Payable		$231
		Cash		$13,950