On January 1, 2020, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were issued for $559,231, and pay interest each July 1 and January 1. JWS uses the effective-interest method. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) On January 1, 2020, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The bonds were issued for $559,231, and pay interest each July 1 and January 1. JWS uses the effective-interest method. Prepare the company's journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit (a) Jan. 1, 2020 Cash 559231 Discount on Bonds Payable 40769 Bonds Payable 600000 (6) July 1, 2020 Interest Expense Discount on Bonds Payable Cash (c) Dec. 31, 2020 Interest Expense Discount on Bonds Payable Interest Payable

Solution: Journal Entries - JWS Corporation Date Particulars Debit Credit 1-Jan-20 Cash Dr $559,231.00 Discount on bond payable Dr $40,769.00 To Bond Payable $600,000.00 (To record issue of bond) 1-Jul-20 Interest Expense Dr ($559,231*8%*6/12) $22,369.00 To Discount on bond payable $1,369.00 To Cash ($600,000*7%*6/12) $21,000.00 (Being first semiannual interest payment made and discount amortized) 31-Dec-20 Interest Expense Dr [($559,231 + $1,369)*4%] $22,424.00 To Discount on bond payable $1,424.00 To Interest payable $21,000.00 (Being first semiannual interest accrued and discount amortized) .

On January 1, 2020, JWS Corporation issued $600,000 o…

Answers

Solution:

Journal Entries - JWS Corporation
Date	Particulars	Debit	Credit
1-Jan-20	Cash Dr	$559,231.00
	Discount on bond payable Dr	$40,769.00
	To Bond Payable		$600,000.00
	(To record issue of bond)

1-Jul-20	Interest Expense Dr ($559,2318%6/12)	$22,369.00
	To Discount on bond payable		$1,369.00
	To Cash ($600,0007%6/12)		$21,000.00
	(Being first semiannual interest payment made and discount amortized)

31-Dec-20	Interest Expense Dr [($559,231 + $1,369)*4%]	$22,424.00
	To Discount on bond payable		$1,424.00
	To Interest payable		$21,000.00
	(Being first semiannual interest accrued and discount amortized)

Similar Solved Questions

1 answer

Problems from Phillips: roblems 1: 8; 2: 3, 5. 4. Clearly and concisely answer the following...

Problems from Phillips: roblems 1: 8; 2: 3, 5. 4. Clearly and concisely answer the following conceptual questions (5 marks each) (a) According to classical mechanics, an electron moving in an atom should be able to do so with any angular momentum whatever. According to Bohr's theory of the hydro...

On January 1, 2020, JWS Corporation issued $600,000 of 7% bonds, due in 10 years. The...

Question:

Answers

Similar Solved Questions