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Bonds Payable Journal Entries; Issued at Par Plus Accrued Interest Askew, Inc., which closes its books on December 31, is authorized to issue $900,000 of nine percent, 15-year bonds dated May 1, with interest payments on November 1 and May 1. Required Prepare journal entries to record the following events, assuming that the bonds were sold at 100 plus accrued interest on October 1: a. The bond issuance. b. Payment of the first semiannual period's interest on November 1. c. Accrual of bond interest expense at December 31. d. Payment of the semiannual interest on May 1 of the following year. e. Retirement of $400,000 of the bonds at 101 on May 1, Year 2 (immediately after the interest payment on that date). Round to the nearest dollar. Use 360 days for calculations. Date General Journal Description Oct.1 Cash b. Bonds Payable Bond Interest Payable Issuance of bonds at 100 plus accrued interest. Nov.1 Bond Interest Payable Bond Interest Expense c. Cash To record semiannual interest payment. Dec 31 Bond Interest Expense d. Bond Interest Payable To accrue interest expense. May 1 Bond Interest Payable e Bond Interest Expense Cash To record semiannual interest payment. May 1 Bonds Payable Loss on Bond Retirement Cash To record retirement of bonds. Check ° Debit Credit 0 x $ 0 х 0✓ 0 x 0✓ 0 x 0✓ 0✓ 0 x 0 х 0✓ 0 x 0 x 0✓ 0 x 0✓ ÷ 0✓ 0 x = 0 x 0✓

Bonds Payable Journal Entries; Issued at Par Plus Accrued Interest Askew, Inc., which closes its books on December 31, is authorized to issue $900,000 of nine percent, 15-year bonds dated May 1, with interest payments on November 1 and May 1. Required Prepare journal entries to record the following events, assuming that the bonds were sold at 100 plus accrued interest on October 1: a. The bond issuance. b. Payment of the first semiannual period's interest on November 1. c. Accrual of bond interest expense at December 31. d. Payment of the semiannual interest on May 1 of the following year. e. Retirement of $400,000 of the bonds at 101 on May 1, Year 2 (immediately after the interest payment on that date). Round to the nearest dollar. Use 360 days for calculations. Date General Journal Description Oct.1 Cash b. Bonds Payable Bond Interest Payable Issuance of bonds at 100 plus accrued interest. Nov.1 Bond Interest Payable Bond Interest Expense c. Cash To record semiannual interest payment. Dec 31 Bond Interest Expense d. Bond Interest Payable To accrue interest expense. May 1 Bond Interest Payable e Bond Interest Expense Cash To record semiannual interest payment. May 1 Bonds Payable Loss on Bond Retirement Cash To record retirement of bonds. Check ° Debit Credit 0 x $ 0 х 0✓ 0 x 0✓ 0 x 0✓ 0✓ 0 x 0 х 0✓ 0 x 0 x 0✓ 0 x 0✓ ÷ 0✓ 0 x = 0 x 0✓

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5PB: Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
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Bonds Payable Journal Entries; Issued at Par Plus Accrued Interest Askew, Inc., which closes its books on December 31, is authorized to issue $900,000 of nine percent, 15-year bonds dated May 1, with interest payments on November 1 and May 1. Required Prepare journal entries to record the following events, assuming that the bonds were sold at 100 plus accrued interest on October 1: a. The bond issuance. b. Payment of the first semiannual period's interest on November 1. c. Accrual of bond interest expense at December 31. d. Payment of the semiannual interest on May 1 of the following year. e. Retirement of $400,000 of the bonds at 101 on May 1, Year 2 (immediately after the interest payment on that date). Round to the nearest dollar. Use 360 days for calculations. Date a. General Journal Description Oct.1 Cash Bonds Payable Bond Interest Payable Issuance of bonds at 100 plus accrued interest. b. Nov.1 Bond Interest Payable Bond Interest Expense Cash C. To record semiannual interest payment. Dec.31 Bond Interest Expense Debit Credit $ 0 x $ 0✓ 0✓ 0 × 0 ✓ 0 × 0 × 0 ÷ 0 % 0 ✓ ÷ 0 ✓ 0 × > > * Bond Interest Payable ÷ = To accrue interest expense. d. May 1 Bond Interest Payable Bond Interest Expense Cash To record semiannual interest payment. e. May 1 Bonds Payable Loss on Bond Retirement Check Cash To record retirement of bonds. > > 0 % 0 ✓ 0 ✓ 0 x 0 × 0 ✓ = 0 × 0 ✓ 0 ✓ 0 × 0 × 0 ✓ = 0 % 0 ✓ ÷ 0 ✓ 0 x
Transcribed Image Text:Bonds Payable Journal Entries; Issued at Par Plus Accrued Interest Askew, Inc., which closes its books on December 31, is authorized to issue $900,000 of nine percent, 15-year bonds dated May 1, with interest payments on November 1 and May 1. Required Prepare journal entries to record the following events, assuming that the bonds were sold at 100 plus accrued interest on October 1: a. The bond issuance. b. Payment of the first semiannual period's interest on November 1. c. Accrual of bond interest expense at December 31. d. Payment of the semiannual interest on May 1 of the following year. e. Retirement of $400,000 of the bonds at 101 on May 1, Year 2 (immediately after the interest payment on that date). Round to the nearest dollar. Use 360 days for calculations. Date a. General Journal Description Oct.1 Cash Bonds Payable Bond Interest Payable Issuance of bonds at 100 plus accrued interest. b. Nov.1 Bond Interest Payable Bond Interest Expense Cash C. To record semiannual interest payment. Dec.31 Bond Interest Expense Debit Credit $ 0 x $ 0✓ 0✓ 0 × 0 ✓ 0 × 0 × 0 ÷ 0 % 0 ✓ ÷ 0 ✓ 0 × > > * Bond Interest Payable ÷ = To accrue interest expense. d. May 1 Bond Interest Payable Bond Interest Expense Cash To record semiannual interest payment. e. May 1 Bonds Payable Loss on Bond Retirement Check Cash To record retirement of bonds. > > 0 % 0 ✓ 0 ✓ 0 x 0 × 0 ✓ = 0 × 0 ✓ 0 ✓ 0 × 0 × 0 ✓ = 0 % 0 ✓ ÷ 0 ✓ 0 x
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