Okay... it seems like I can start the problem and even end it but for some reason when closing out the year (the third and fourth journal entry for this discount bond payable) my mind goes blank... I guess I just need either an explanation on how to do journalize them or something... HELP! (The Part that I need Major help with is Bolded and Underlined.. )

Original:
Face: 1,000,000
Int Dates: May 1 and Nov 1
Auth. Date: May 1, 1985
Maturity: 8 years
Selling Price: 96 1/2 %
Contract Interest: 7%
Selling Date: July 1, 1985
Fiscal Year: Jan 1st to Dec 31st.
Journalize the first 6 entries


Face: 1,000,000

Face: 1,000,000
Quotation: * .9625

SP: - 962,500
Selling Price: 962,500

Discount: 37,500
Interest: + 11,666
Cash Rec: 974,166

Interest: 1,000,000*.07*2/12= 11,666 (Rounding to the Nearest Dollar Place)

Journal

July 1
Cash (D) 974166
Discount Bond Pay. (D) 37500
Bond Pay. (Cr) 1000000
Int. Bond Pay (Cr) 11666

Nov 1
Bond Interest Exp (D) 24930
Bond Int. Payable (D) 11666
Discount on Bond Pay. (Cr.) 1596
Cash (Cr) 35000

Dec 31
Bond Int Expense (D)
Discounts on Bond Pay. (Cr.)
Bond Int Pay (Cr.)

Dec 31
Income Summary (D)
Bond Interest Exp (Cr)


May 1st
Bond Interest Expense (D)24929
Bond interest Pay. (D) 11667
Discount on bond Payable (Cr) 1596
Cash (Cr)35000

Nov. 1st
Bond Int. Expense (D) 37394
Discount on Bond Payable (Cr) 2394
Cash (Cr.) 35000

For this part I had come up with but I don't exactly know if I am correct.

Dec 31
Bond Int Expense (D) 12464
Discounts on Bond Pay. (Cr.) 798
Bond Int Pay (Cr.) 11666

Can you please not post your questions more than once, and never to more than one forum. I spent quite a bit of time going through this on the other forum -- if someone found this one and didn't know that, they could end up wasting a lot of time going through it all over again, for nothing.