[Chrissy00]

I need help with two accounting questions please. I tried answering them twice already and got it wrong both times. Also if you could, can you explain the break down for me, as to how you got the answer so that I'll know it for the future. Thanks.

1)On January 1, a company issues bonds dated January 1 with a par value of $230,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 6% and the bonds are sold for $239,811. The journal entry to record the issuance of the bond is:

(a) Debit Cash $239,811; credit Discount on Bonds Payable $9,811; credit Bonds Payable $230,000.
(b) Debit Cash $239,811; credit Premium on Bonds Payable $9,811; credit Bonds Payable $230,000.
(c) Debit Cash $239,811; credit Bonds Payable $239,811.
(d) Debit Cash $230,000; debit Premium on Bonds Payable $9,811; credit Bonds Payable $239,811.
(e) Debit Bonds Payable $230,000; debit Interest Expense $9,811; credit Cash $239,811.


2)On January 1, a company issues bonds dated January 1 with a par value of $460,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $441,361. The journal entry to record the issuance of the bond is:

(a) Debit Cash $441,361; credit Bonds Payable $441,361.
(b) Debit Cash $441,361; debit Premium on Bonds Payable $18,639; credit Bonds Payable $460,000.
(c) Debit Cash $441,361; debit Discount on Bonds Payable $18,639; credit Bonds Payable $460,000.
(d) Debit Bonds Payable $460,000; debit Interest Expense $18,639; credit Cash $478,639.
(e) Debit Cash $460,000; debit Discount on Bonds Payable $18,639; credit Bonds Payable $478,639.

[JudyKayTee]

Please post your work.

Ask Me Help Desk - Announcements in Forum : Homework Help
“Read this first - Expectations for the Homework Help Board:

Do not simply retype or paste a question from your book or study material

We won't do your homework questions for you. You were given the assignment for you to learn.

If you come up with your own answer and post it for us to critique that is within reason.

If you have some SPECIFIC questions that you couldn't find or didn't understand, we may help with that. But this is your assignment, so show us you have at least attempted to complete it on your own.

Thank you.”