USA Help on HW- Bonds issued at par.

[UProflcopterz]

Hi everyone. I'm seeking help on a problem my professor assigned me in class. I am unsure of the proper entries to record due to the date the bonds were issued, it goes as following.

X corporation has a June 30th fiscal year end. On January 1st 2012, X corporation issues 10 year bonds with a face value of 800,000 and a stated interest rate of 6% with interest payable semi-annually on April and October 1st each year. X corp. uses the straight-line method to amortize any bond premium or discount.

The actual assignment...

Record the journal entries required on January 1, 2012, April 1, 2012 and June 30,2012 assuming the bonds were issued at par. Remember to account for accrued interest to the issue date.

Thanks to any advice and help in advance that you can offer!

 

[UProflcopterz]

Here's the answer I came up with...
1/1/12
Dr. Cash. 800,000
Cr bonds payable. 800,000

4/1/12
Dr. Interest expense 40,000
Cr. Cash 40,000
800,000 x .06 x 6/12

6/30/12
Dr. Interest expense 20,000
Cr. Interest payable 20,000
800,000x .06 x 2/12

 

[Triest123]

1/1/12
Dr Cash $800,000
Cr Long term Liabilities - Bonds $800,000
To record the bond issued

3/31/12
Dr Interest expense $12,000
Cr Interest payable $12,000
($800,000 x 6% x 3/12)
To record the bond interest for Jan - Mar 2012
(Since the bond was issued on 1 Jan 2012 and the interests is paid on 1 Apr,
under accural basis, we need to provide interests for Jan- Mar 12 (i.e. the
expenses actually incurred in the current accounting period)

4/1/12
Dr Interest payable $12,000
Cr Cash $12,000
To record the payment for the accrued bond interest

6/30/12
Dr Interest expense 12,000
Cr Interest payable 12,000
($800,000 x 6% x 3/12)
To record the bond interest for Apr - Jun 2012

 

[UProflcopterz]

1/1/12
Dr Cash $800,000
Cr Long term Liabilities - Bonds $800,000
To record the bond issued

3/31/12
Dr Interest expense $12,000
Cr Interest payable $12,000
($800,000 x 6% x 3/12)
To record the bond interest for Jan - Mar 2012
(Since the bond was issued on 1 Jan 2012 and the interests is paid on 1 Apr,
under accural basis, we need to provide interests for Jan- Mar 12 (i.e. the
expenses actually incurred in the current accounting period)

4/1/12
Dr Interest payable $12,000
Cr Cash $12,000
To record the payment for the accrued bond interest

6/30/12
Dr Interest expense 12,000
Cr Interest payable 12,000
($800,000 x 6% x 3/12)
To record the bond interest for Apr - Jun 2012

After reviewing the problem more I came up with a different answer than my original, more similar to the correct one you have provided me with. Instead at 6/30/12 I only accounted for two months of bond interest instead of three. Thank you for your help Triest123!