Adjusting journal entry to record series 2019a debit credit debt service fund other financing source proceeds from bonds 6 38 999 73 debt service fund other financing source premium on debt issuance 8 57 642 62. The account premium on bonds payable is a liability account that will always appear on the balance sheet with the account bonds payable. The corporation s journal entry to record the issuance of the bond on january 1 2019 will be.
Let s assume that this 9 bond being issued in an 8 market will sell for 104 100 plus 0 accrued interest. On the date of record 100 000 shared of preferred stock were outstanding. Declared a quarterly dividend of 0 50 per share on common stock and 1 00 per share on preferred stock.
Issued 500 000 of 10 year 5 bonds at 104 with interest payable semiannually. Accounting q a library how to journal. Prepare the journal entry to record the interest payment on june 30 of this year.
If no entry is required for a transaction event select no journal entry required in the first account field record the issuance of bonds. Prepare the journal entry to record the issuance of the bonds. If monthly financial statements are issued by the corporation the following journal entries are needed in the year 2019 including the entry when the bonds were issued on february 1 2019.
Journal entries for interest expense monthly financial statements. The entries will be similar for the years 2021 2022 and 2023. Continuing with the above example let s understand the journal entry of discount on bonds payable in the books of xyz inc.
Journal entry of discount on bond payable. Will issue its bond at an issue price of us 957 88 to compensate for the return on investment of the bondholders. Bond price 957 88.
Accounting for convertibles refers to the accounting of the debt instrument that entitles or provide rights to the holder to convert its holding into a specified number of issuing company s shares where the difference between the fair value of total securities along with other consideration that is transferred and the fair value of the securities.
Issue of bonds journal entry. For our example assume jan 1 carr issues 100 000 12 3 year bonds for a price of 95 1 2 or 95 50 with interest to be paid semi annually on june 30 and december 30 for cash. We know this is a discount because the price is less than 100. The entry to record the issue of the bond on january 1 would be. On 1 january 2001 codestreet inc.
Issued 100 000 100 face value bonds carrying a coupon rate of 8 payable semiannually. The term of the bonds is 20 years. Journalize issuance of bonds and the first semi annual payment. Let s consider a 1 000 bond due to mature in 10 years paying 6 semi annual coupon rate when the market interest rate is 6 2.
You can verify that this bond will sell at 985 26. If the 10 000 bonds are issued total bond proceeds will be 9 852 591. You will need to pass the following journal entry to record the issue of this bond. Accounting for convertible bonds debt.
Accounting for convertible bonds debt. You will need to pass the following journal entry to record the issue of this bond. If the 10 000 bonds are issued total bond proceeds will be 9 852 591.
You can verify that this bond will sell at 985 26. Let s consider a 1 000 bond due to mature in 10 years paying 6 semi annual coupon rate when the market interest rate is 6 2. Journalize issuance of bonds and the first semi annual payment.
The term of the bonds is 20 years. Issued 100 000 100 face value bonds carrying a coupon rate of 8 payable semiannually. On 1 january 2001 codestreet inc.
The entry to record the issue of the bond on january 1 would be. We know this is a discount because the price is less than 100. For our example assume jan 1 carr issues 100 000 12 3 year bonds for a price of 95 1 2 or 95 50 with interest to be paid semi annually on june 30 and december 30 for cash.
