Question1 Laudie Company issued $455,000 of 8%, 10-year bonds on January 1, 2017

Question

Question1 Laudie Company issued $455,000 of 8%, 10-year bonds on January 1, 2017, at face value. Interest is payable annually on January 1 Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2017 SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the journal entry to record the accrual of interest on December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manualy. Date Account Titles and Explanation Debit Credit Dec. 31, 2017 SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the journal entry to record the payment of interest on January 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2018

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Jan 1,2017 Cash 455000     Bonds payable 455000 Dec 31,2017 Interest expense (455000*8%) 36400     Interest payable 36400 Jan 1,2018 Interest payable 36400     Cash 36400 Jan 1,2017 Bonds payable 455000     Cash 455000

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