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Calculate the total interest expense incurred in 2020

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Question

Nature Gnome Company plans to raise the capital by issuing $ 1000,000 of 7?%, seven?-year bonds on January? 2, 2020. The bonds pay interest semiannually on June 30 and December 31.

The company receives $997,900 when the bonds are issued.The company also issues a mortgage payable for $600,000 on January? 2, 2020.

The proceeds from the mortgage will be used to construct the new building. The mortgage requires annual payments of $60,000 plus interest for ten ?years, payable on December 31. The mortgage interest rate is 8?%.

Please help me journalize.

Jan. 2 2020 - Cash received from bond issue

Jan. 2 2020 - Cash received from the mortgage payable

Jun.30 2020 - Semiannual bond interest payments for 2020

Amortize the premium or discount using the? straight-line amortization method.

Start by recording the semiannual bond interest payment on June? 30, 2020

Now record the semiannual bond interest payment on December? 31, 2020

Payment on the mortgage payable for 2020

Calculate the total interest expense incurred in 2020

Bonds -

Mortgage -

Total =

Reference no: EM132317528

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