Laudie Company issued $371,000 of 8%, 10-year bonds on January 1, 2014, at face

Question

Laudie Company issued $371,000 of 8%, 10-year bonds on January 1, 2014, at face value. Interest is payable semiannually on July 1 and January 1. Prepare the journal entry to record the issuance of the bonds. Prepare the journal entry to record the payment of interest on July 1, assuming no previous accrual of interest. Prepare the journal entry to record the accrual of interest on December 31. Prepare the journal entry to record the redemption of bonds at maturity, assuming interest for the last interest period has been paid and recorded.

Explanation / Answer

Date Account title Debit credit jan 1 2014 cash 371000 Bond payable 371000 [issuance of bond recorded] july 1 2014 Intereste expense 14840 cash     (371000*.08*6/12) 14840 [interest for first semiannual month of 2014 ] Dec 31 2014 Interest expense 14840 Interest payable 14840 [being interest accrued but not paid ] jan 31 2024 Bond payable 371000 cash 371000 [bond redeemed a maturity ]

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.