Problem 1: On January 1, 2007, the Kings Corporation issued 10% bonds with a face value of $100,000. The bonds are sold for $96,000. The bonds pay interest semiannually on June 30 and December 31 and the maturity date is December 31, 2011. Kings records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31, 2007, is _______.
Problem 2. Bonds with a face amount $1,000,000, are sold at 97. The entry to record the issuance is _______.
Cash 1,000,000
Premium on Bonds Payable 30,000
Bonds Payable 970,000
Cash 970,000
Premium on Bonds Payable 30,000
Bonds Payable 1,000,000
Cash 970,000
Discount on Bonds Payable 30,000
Bonds Payable 1,000,000
Cash 970,000
Bonds Payable 970,000