On July 1, 2018, Volunteer Inc. issued bonds with a $500,000 face value at 108.0 and the 5-year bonds have a 10% interest rate in a market with a rate of 8%. Interest is payable annually and the effective-interest method is used for amortization. Prepare journal entries for the following transactions.
Extracted text: Question 1 25 pts On July 1, 2018, Volunteer Inc. issued bonds with a $500,000 face value at 108.0 and the 5-year bonds have a 10% interest rate in a market with a rate of 8%. Interest is payable annually and the effective-interest method is used for amortization. Prepare journal entries for the following transactions. Premium on Bonds Payable Interest Income Discount on Bonds Payable Interest Expense Cash Bonds Payable PLEASE NOTE: For each of the following journal entries there is one account's treatment (DR or CR), that depends on whether it is a bond issued at a premium or a discount. You are to identify if it is a DR or a CR. You must enter the account names exactly as written above and all dollar amounts will be rounded to whole dollars with "$" and commas as needed (i.e. $12,345). [HINT - You definitely will want to use this EXCEL spreadsheet Chapter13 HW-03 #1-#4 Worksheets.xlsx to assist in your calculations. You will need to complete the worksheet in order to answer all the questions. In order to use the worksheet, you will also need to apply the Market Price of Bonds (% of Face).] July 1, 2018: to record issuing the bonds DR DR/CR ? CR • June 30, 2019: to record the amortization & payment of interest to bondholders: DR DR/CR ? CR
Extracted text: CRAFA BSN II Textbook Oceanogr DR DR/CR ? CR . June 30, 2020: to record the amortization & payment of interest to bondholders: DR DR/CR ? CR • What was the last period's interest expense adjustment to complete the amortization? Question 2 On July1, 2018, Dixon Inc. issued bonds with a $500,000 face value at 96.0 and the 5-year bonds have a 10% interest rate in a marke Interest is payable annually and the effective-interest method is used for amortization. Prepare journal entries for the following trans