Problem 10-33A Effective interest versus straight-line amortization [LO 4 5]

Problem 10-33A Effective interest versus straight-line amortization [LO 4 5]

On January 1 2013 Wells Corp. sold $100000 of its own 6 percent 10-year bonds. Interest is payable annually on December 31. The bonds
were sold to yield an effective interest rate of 5 percent. Wells Corp. uses the effective interest rate method. The bonds sold for
$104330.

Prepare the journal entry for the issuance of the bonds.
(Click to select) Premium on bonds payable Interest expense Credit card expense Cash Interest revenue Interest payment Retained earnings Accounts receivable (Click to select) Cash Credit card expense Interest receivable Premium on bonds payable Depreciation expense Interest revenue Bonds payable Accounts receivable (Click to select) Credit card expense Cash Interest receivable Interest revenue Accounts receivable Depreciation expense Bonds payable Premium on bonds payable
Prepare the journal entry for the amortization of the bond premium and the payment of the interest on December 31 2015. (Assume effective
interest amortization.) (Round your intermediate calculations and final answers to the nearest dollar
amount.)
(Click to select) Credit card expense Bonds payable Interest expense Cash Accounts receivable Common stock Premium on bonds payable Interest receivable (Click to select) Credit card expense Premium on bonds payable Interest expense Cash Bonds payable Common stock Accounts receivable Interest receivable (Click to select) Interest expense Credit card expense Interest payment Equipment Accounts payable Cash Bonds payable Retained earnings
Prepare the journal entry for the amortization of the bond premium and the payment of interest on December 31 2015. (Assume straight-line
amortization.)
(Click to select) Interest expense Depreciation expense Credit card expense Cash Accounts receivable Premium on bonds payable Common stock Equipment (Click to select) Premium on bonds payable Cash Credit card expense Equipment Interest expense Common stock Accounts receivable Depreciation expense (Click to select) Common stock Interest payment Bonds payable Cash Retained earnings Premium on bonds payable Credit card expense Accounts receivable
Calculate the amount of interest expense for 2016. (Assume effective interest amortization.) (Round your intermediate
calculations and final answer to the nearest dollar amount.)

Calculate the amount of interest expense for 2016. (Assume straight-line amortization.)