What journal entry should the company make on January 1, 204? What effect does t

Question

What journal entry should the company make on January 1, 204? What effect does this entry have on the accounting equation? What journal entry should the company make to record the sale of the bonds on january 1.2014? What effect does this entry have on the accounting equation? What journal entry should the company make on July 1.2014 to record the first interest payment? What effect does this entry have on the accounting equation? What journal entry should the company make on January 1.2019 to record the first interest payment? What effect does this entry have on the accounting equation?

Explanation / Answer

The interest rate cannot be seen clearly, it lloks like 5% accordingly the interest will change Journal Entries Cash Dr 271000 To Bonds Payable 271000 Asset will increase and liabilities will increase by $ 271000 Interest Payment Interest Dr 6775 (271000*5%/2) To Cash 6775 Assets will decrease Retained Earnings will decrease by $ 6775 Bonds Payable Dr 271000 To cash 271000

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