Company issued a $ 60,000?, 4.0?%, 7?-year bond payable. Journalize the followin

Question

Company issued a $ 60,000?, 4.0?%, 7?-year bond payable. Journalize the following transactions for Vernon ?Company, and include an explanation for each? entry:

a. Issuance of the bond payable at face value on January? 1, 2018.

b. Payment of semiannual cash interest on July? 1, 2018.

c. Payment of the bond payable at? maturity, assuming the last interest payment had already been recorded.? (Give the? date.) ?(Record debits? first, then credits. Select explanations on the last line of the journal? entry.)

Explanation / Answer

Journal entry :

Date account & explanation debit credit Jan 1,2018 Cash 60000 Bonds payable 60000 (To record bond issue) July 1,2018 Interest expense (60000*4%*6/12) 1200 Cash 1200 (To record interest) Jan 1,2025 Bonds payable 60000 Cash 60000 (To record bond maturity)

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