Lumen OHM Assessment

Question 1

On January 1, 2020, Marafuku Company issued $90,000 of 6-year, 6% bonds payable.

Marafuku Company pays interest each January 1 and July 1 and amortized discounts or premium by the straight-line amortization method.

The company can issue its bonds payable under various conditions.

Journalize the issuance of the bond payable at face value.
Journalize the payment of semiannual interest when the bonds are issued at face value.
Journalize Marafuku Company issuance of the bonds assuming the bonds were issued at 95.
Journalize the payment of semiannual interest when the bonds are issued at 95.
Journalize Marafuku Company issuance of the bonds assuming the bonds were issued at 106.
Journalize the payment of semiannual interest when the bonds are issued at 106.

Journalize the issuance of the bond on June 30th and the first interest payment of December 31st.

Journal
Date	Description	Debit	Credit
1	Cash	90,000
1	Bonds Payable		90,000

2	Interest Expense	2,700
2	Cash		2,700

3	Cash	85,500
3	Discount on Bonds Payable	4,500
3	Bonds Payable		90,000

4	Interest Expense	3,075
4	Discount on Bonds Payable		375
4	Cash		2,700

5	Cash	95,400
5	Premium on Bonds Payable		5,400
5	Bonds Payable		90,000

6	Interest Expense	2,250
6	Premium on Bonds Payable	450
6	Cash		2,700