On June 30, Prince Company issues 10%, 10-year bonds payable with at face value

Question

On June 30, Prince Company issues 10%, 10-year bonds payable with at face value of $100,000. The bonds are issued atface value and pay into est on June 30 and December 31 Requirements 1. Journalize the issuance of the bonds on June 30. 2. Journalize the semiannual interest payment on December 31 Requirement 1. Joumalize the issuance of the bonds on June 30. (Record debits first, then credits. Select explanations on the last line of the journal entry) Date Accounts and Explanation Debit Credit Jun. 30

Explanation / Answer

Jun. 30

Debit Credit

Cash $100000

Bonds Payable $100000

b) Debit Credit

Interest Expense $5000

Cash $5000

Where Interest Payments = 0.10*100000/2 = $5000

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