Reference no: EM132823196

Question - Journalize the following transactions

2020

Jan. 2 Issued $8,000,000 of 7 percent, 10-year bonds payable at 97.00.

Jan. 2 Signed a five-year capital lease on machinery. The agreement requires annual lease payments of $80,000, with the first payment due immediately. The present value of the five lease payments is $333,589, using a market rate of 10 percent.

Jul. 2 Paid semi-annual interest and amortized the discount by the straight-line method on the 7 percent bonds payable.

Dec. 31 Accrued semi-annual interest expense and amortized the discount by the straight-line method on the 7 percent bonds.

Dec 31 Recorded amortization on the leased machinery using the straight-line method.

Dec 31 Accrued interest expense at 10 percent on the lease liability.

2030

Jan. 2 Paid the 7 percent bonds at maturity. (Ignore the final interest payment.)

Required - Journalizing bonds payable using the straight-line method and capital lease transactions.