Sylvestor Company issues 10%, five-year bonds, on December 31, 2012, with a par value of $100,000 and semiannual interest payments.

Sylvestor Company issues 10%, five-year bonds, on December 31, 2012, with a par value of $100,000 and semiannual interest payments.

      

Semiannual Period-End			Unamortized Discount			Carrying Value
(0)	12/31/2012		$	7,360		$	92,640
(1)	6/30/2013			6,624			93,376
(2)	12/31/2013			5,888			94,112

    

Use the above bond amortization table and prepare journal entries to record the following.

   

(a)	The issuance of bonds on December 31, 2012.

Explanation:

(b) 

Discount on bonds payable = $7,360 – $6,624 = $736

cash = $100,000 × 10% / 2 = $5,000

 
(c)

Discount on bonds payable = $6,624 – $5,888 = $736

cash = $100,000 × 10% / 2 = $5,000