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

Journal entry on jan 01, 2014 Account title Debit Credit Cash 524,000 Bonds Payable 500,000 Premium on bonds payable 24,000 Asset = Liability + Equity Increase Increase Increase Interest Expense 11,769 Premium   731 To Cash 12,500 Bonds Payable 500,000 To Cash 500,000

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