Thomson Co. produces and distributes semiconductors for use by computer manufact

Question

Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $510,000 of 10-year, 11% bonds on May 1 of the current year at face value,, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.

Journalize the entries to record the above selected transactions for the current year.

May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec. 31 Recorded accrued interest for two months.

Explanation / Answer

Date Account titles and explanation Debit Credit May 1 Cash $510,000 Bonds payable $510,000 Nov. 1 Interest Expense $28,050 Cash $28,050 Dec. 31 Interest Expense $9,350 Interest Payable $9,350

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