Cougar Corp. sold 2-year, 5%, $200,000, bonds on January 1, 2020 for $208,000. Interest is paid semi-annually on June 30 and December 31.
2 points
What is the journal entry to record the issuance of the Bond on 1/1/2020?
8 points: Complete the amortization schedule below.
Period |
Cash Paid |
Interest expense |
amortization |
Carrying |
06/30/2020 |
||||
12/31/2020 |
||||
06/30/2021 |
||||
12/31/2021 |
Date | General Journal | Debit | Credit |
January 1, 2020 | Cash | 208000 | |
Bonds payable | 200000 | ||
Premium on bonds payable | 8000 |
*since nothing is mentioned, straight line method of amortization is assumed.
Period ended | Cash paid | Interest expense | Amortization | Carrying amount |
208000 | ||||
06/30/2020 | 5000 | 3000 | 2000 | 206000 |
12/31/2020 | 5000 | 3000 | 2000 | 204000 |
06/30/2021 | 5000 | 3000 | 2000 | 202000 |
12/31/2021 | 5000 | 3000 | 2000 | 200000 |
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