HEATHROW
General Journal
Part 1.
Trans.
Date Account Titles no. Debit Credit
2004
Jan 1 Cash
Discount on Bonds Payable
Bonds Payable
Part 2.
Cash payment
Straight-line discount amortization
Bond interest expense
Part 3.
Thirty payments of $60,000
Par value at maturity
Total repaid
Less amount borrowed
Total bond interest expense
or:
Thirty payments of $60,000
Plus discount
Total bond interest expense
Part 4.
HEATHROW
Unamortized Carrying
Semiannual Interest Period Discount Value
1/1/2004
6/30/2004
12/31/2004
6/30/2005
12/31/2005
HEATHROW
General Journal
Part 5.
Trans.
Date Account Titles no. Debit Credit
2004
Jun 30 Bond Interest Expense
Discount on Bonds Payable
Cash
Dec 31 Bond Interest Expense
Discount on Bonds Payable
Cash
HEATHROW
General Journal
Part 6-1.
Trans.
Date Account Titles no. Debit Credit
2004
Jan 1 Cash
Premium on Bonds Payable
Bonds Payable
Part 6-2.
Cash payment
Straight-line premium amortization
Bond interest expense
Part 6-3.
Thirty payments of $60,000
Par value at maturity
Total repaid
Less amount borrowed
Total bond interest expense
or:
Thirty payments of $60,000
Less premium
Total bond interest expense
Part 6-4.
HEATHROW
Unamortized Carrying
Semiannual Interest Period Premium Value
1/1/2004
6/30/2004
12/31/2004
6/30/2005
12/31/2005
HEATHROW
General Journal
Part 6-5.
Trans.
Date Account Titles no. Debit Credit
2004
Jun 30 Bond Interest Expense
Premium on Bonds Payable
Cash
Dec 31 Bond Interest Expense
Premium on Bonds Payable
Cash
Given Data P14-02A:
HEATHROW
Bonds issued, face value $2,000,000
Annual interest 6%
Maturity in years 15
Issuance price 1,728,224
Issue price for Part 6 $2,447,990
Check figures:
(3) $2,071,776
(4) 12/31/2005 carrying value 1,764,460
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