Reference no: EM132768357
Question - Blossom Company issued $510,000, 9%, 20-year bonds on January 1, 2020, at 104. Interest is payable annually on January 1. Blossom uses straight-line amortization for bond premium or discount.
The journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Jan 1, 2020 Cash 530400
Bonds Payable 510000
Premium on Bonds Payable 20400
The journal entry to record the accrual of interest and the premium amortization on December 31, 2020.
Date Account Titles and Explanation Debit Credit
Dec 31, 2020
Interest expense 44880
Premium on Bonds payable 1020
Interest Payable 45900
Required - Prepare the journal entry to record the payment of interest on January 1, 2021.
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