The board of directors of the Lawrence Corporation authorized the issuance of $6

Question

The board of directors of the Lawrence Corporation authorized the issuance of $600,000 face value of 10-year, 9 percent bonds dated May 1, 2019, and maturing on May 1,2029. Interest is payable semiannually on May 1 and November 1 2019 May 1 Issued $60,000 of bonda at face value. Nov. 1 Paid the semiannual interest on the bonds issued. Dec. 31 Recorded the adjusting entry for the accrued bond interest. 31 Closed the Bond Interest Expense account into the Income Summary account. 2020 Jan. 1 Reversed the adjusting entry for accrued bond interest. Hay 1 Paid the semiannual interest on the bonds issued. 1 Issued $50,000 of bonds at face value. Nov. 1 Paid the semiannual interest on the bonds issued Dec. 31 Recorded the adjusting entry for the accrued bond interest. 31 Closed the Bond Interest Expense account into the Income Summary account. Record the above transactions in a general journal. View transaction list Journal entry worksheet 6 8 9 10 KPrev 2 of 10I Next>

Explanation / Answer

Journal Entries Date Accounts title and explanations Debit $ Credit $ 1-May Cash Account Dr. 60000      Bonds payable 60000 1-Nov Interest expense (60000*9%/2) 2700      Cash Account 2700 31-Dec Interest expense Dr. 900     Interest payable 900 31-Dec Income Summary Dr. 3600    Interest expense 3600 1-Jan Interest payable Dr. 900 Interest expensse 900 1-May Interest expense Dr. 2700     Cash Account 2,700 1-May Cash account Dr. 50000     Bonds payable 50000 1-Nov Interest expense Dr. 4950      Cash Account 4950 31-Dec Interest expense (110,000*9%*2/12) 1650     Interest payable 1650 31-Dec Income Summary Dr. 8400    Interest expense 8400

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