Hillside issues $2,300,000 of 8%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,815,190. Required: 1. Prepare the January 1, 2015, journal entry to record the bonds’ issuance.

Hillside issues $2,300,000 of 8%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,815,190.

Required:
1.	Prepare the January 1, 2015, journal entry to record the bonds’ issuance.

For each semiannual period, complete the table below to calculate the cash payment.

Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.

5.	Prepare the journal entries to record the first two interest payments.

Explanation:

2(a)	Cash Payment = $2,300,000 × 8% × 6/12 year = $92,000
(b)	Premium = $2,815,190 – $2,300,000 = $515,190
	Straight-line premium amortization = $515,190 / 30 semiannual periods
	= $17,173
(c)	Bond interest expense = $92,000 – $17,173 = $74,827

3.

Thirty payments of $92,000	$	2,760,000
Par value at maturity		2,300,000
Total repayment		5,060,000
Less amount borrowed		(2,815,190)
Total bond interest expense	$	2,244,810

here