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Company Corp. has issued long-term debt. The following information pertains to the issuance of this debt...

Company Corp. has issued long-term debt. The following information pertains to the issuance of this debt and necessary journal entries related to this debt. Use an Excel spreadsheet to prepare journal entries and move amounts to the general ledger.

1) The company issues 5-year bonds on 1/1. The face amount of these bonds is $1,000,000 with a coupon rate of 6%. The bonds pay interest semiannually and yield 7%.

2) The company makes adjusting entries on 12/31. Make any adjusting entries that are necessary related to the bonds.

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Answer #1

Answer

1-Jan

Cash

    958,416.97

Discount on Bonds Payable

       41,583.03

Bonds Payable

    1,000,000.00

(Being Bonds issued at discount)

31-Dec

Interest Expense

       33,668.65

Cash

          30,000.00

Discounts on Bonds Payable

             3,668.65

(being interest recorded and Discount amortized)

Dear Student, if u have any query, plz feel free to reach me.

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