P15-1A S: SET A at face va P15-1A On May 1, 2017, Herron Corp., issued $600,000,

Question

P15-1A

S: SET A at face va P15-1A On May 1, 2017, Herron Corp., issued $600,000, 9%, 5-year bonds were dated May I, 2017, and pay interest annually on May 1. Financ The bonds ments are prepared annually on December 31 Instructions Prepare the journal entry to record the issuance of the bonds. (a (b) Prepare the adjusti (c) Show the balance sheet presentation on December 31, 2017 ember 31, 2017. d) Prepare the journal entry to record payment of interest on May 1, 2018, (e) Prepare the adjusting entry to record the accrual of interest on December 31 2 () Assume that on January 1, 2019, Herron pays the accrual bond interest and calls the bonds. The call price is 102. Record the payment of interest and redem bonds

Explanation / Answer

Solution a:

Solution b:

Solution c:

Solution d:

Solution e:

Solution f:

Journal Entries - Herron Corp Date Particulars Debit Credit 1-May-17 Cash Dr $600,000.00      To Bond Payable $600,000.00 (To record issue of bond at face value)

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