On January 1, 2018, MCU issued 6%, 20-year bonds payable with face value of $1,100,000. These bonds pay interest on June 30 and December 31. The issue price of the bonds is 106. Journalize the following bond transactions:
a. Issuance of the bonds on January 1, 2018.
b. Payment of interest and amortization on June 30, 2018.
c. Payment of interest and amortization on December 31, 2018.
d. Retirement of the bond at maturity on December 31, 2037, assuming the last interest payment has already been recorded.
On January 1, 2018, MCU issued 6%, 20-year bonds payable with face value of $1,100,000. These bonds pay interest on June 30 and December 31. The issue price of the bonds is 106. Journalize the following bond transactions:
a. Issuance of the bonds on January 1, 2018.
b. Payment of interest and amortization on June 30, 2018.
c. Payment of interest and amortization on December 31, 2018.
d. Retirement of the bond at maturity on December 31, 2037, assuming the last interest payment has already been recorded.
Related questions
Exercise 10-4 Straight-Line: Recording bond issuance and discount amortization LO P1, P2
Paulson Company issues 6%, four-year bonds, on December 31, 2017, with a par value of $90,000 and semiannual interest payments.
| Semiannual Period-End | Unamortized Discount | Carrying Value | ||||||
| (0) | 12/31/2017 | $ | 6,533 | $ | 83,467 | |||
| (1) | 6/30/2018 | 5,716 | 84,284 | |||||
| (2) | 12/31/2018 | 4,899 | 85,101 | |||||
Use the above straight-line bond amortization table and prepare journal entries for the following.
(a) The issuance of bonds on December 31, 2017.
(b) The first interest payment on June 30, 2018.
(c) The second interest payment on December 31, 2018.
