EXERCISE 16­3 (a) Jan.  1 200,000 (b) July  1   8,000 (c) Dec. 31   8,000 Cash........................................................ Bonds Payable................................ Bond Interest Expense.......................... Cash ($200,000 X 8% X 1/2)........... Bond Interest Expense..........................

Bond Interest Payable.................... 200,000

  8,000

  8,000

EXERCISE 16­4 (a) Jan. 1 2004 Cash....................................................... Bonds Payable............................... 300,000

300,000 (b) July 1

 13,500 (c) Dec. 31   13,500 (d) Jan. 1

Bond Interest Expense......................... Cash ($300,000 X 9% X 1/2)..........

 13,500

Bond Interest Expense......................... Bond Interest Payable................... 2014 Bonds Payable...................................... Cash...............................................

 13,500

300,000

300,000

*PROBLEM 16­9B (a) 2006 Bond Interest Payable.................... Cash......................................... Bond Interest Expense................... Premium on Bonds Payable..........   ($200,000 ÷ 20) Cash......................................... Bonds Payable................................ Premium on Bonds Payable.......... Gain on Bond Redemption....   ($1,914,000 – $1,818,000) Cash ($1,800,000 X 101%)......
*($200,000 – $10,000) X .60 = $114,000

Jan.  1

  120,000**

120,000 (b) July  1

  

  110,000**    10,000**    1,800,000**    114,000**

120,000 (c) July  1  96,000 1,818,000

  

(d) Dec. 31 48,000

Bond Interest Expense................... Premium on Bonds Payable.......... Bond Interest Payable............   ($1,200,000 X 8% X 1/2)

  44,000**     4,000**

  

**$200,000 – $10,000 – $114,000 = $76,000; $10,000 X .40.

$76,000  = $4,000 or  19