Woodwick Company issues 8%, five-year bonds, on December 31, 2012, with a par value of $103,000 and semiannual interest payments. Semiannual Period-End Unamortized Premium Carrying Value (0) 12/31/2012 $ 8,171 $ 111,171 (1) 6/30/2013 7,354 110,354 (2) 12/31/2013 6,537 109,537 Use the above straight-line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on December 31, 2012. (b) The first interest payment on June 30, 2013. (c) The second interest payment on December 31, 2013.

Woodwick Company issues 8%, five-year bonds, on December 31, 2012, with a par value of $103,000 and semiannual interest payments.

   

Semiannual Period-End			Unamortized Premium			Carrying Value
(0)	12/31/2012		$	8,171		$	111,171
(1)	6/30/2013			7,354			110,354
(2)	12/31/2013			6,537			109,537

   

Use the above straight-line bond amortization table and prepare journal entries for the following.

(a)	The issuance of bonds on December 31, 2012.
(b)	The first interest payment on June 30, 2013.
(c)	The second interest payment on December 31, 2013.

Explanation:

(b)

Premium on Bonds Payable = $8,171 – $7,354 = $817

Cash = $103,000 × 8% × 1/2 = $4,120

(c)

Premium on Bonds Payable = $7,354 – $6,537 = $817

Cash = $103,000 × 8% × 1/2 = $4,120