On January 1, 2014, InnoSolutions, Inc., issued $220,000 in bonds at face value.

Question

On January 1, 2014, InnoSolutions, Inc., issued $220,000 in bonds at face value. The bonds have a stated interest rate of 7 percent. The bonds mature in 10 years and pay interest once per year on December 31. Required: 1. Prepare the journal entry to record the bond issuance. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) view transaction listew general journal Journal Entry Worksheet Record the journal entry to Record the journal entry to bond issuance. Transaction General Journal Debit Credit Enter debits before credits done clear entry record entry

Explanation / Answer

1) Cash Account ..............Dr 220000

To 7% Debentures 220000

( Being Bonds issued)

2) Interest Expense ..............Dr ( 220000*7%) 15400

To Cash / Bank 15400

( Being interest expense booked)

3) Debentures A/c ..............Dr 220000

Premium on redemption ............Dr 2200

To Bank 222200

( Being debentures redeemed)

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