P10-3A Prepare entries to record issuance of bonds, interest accrual, and bond r

Question

P10-3A Prepare entries to record issuance of bonds, interest accrual, and bond redemption LO 3. 5) On May 1, 2019, Herron Corp. issued $600,000, 9%, 5-year bonds at face value. The bonds were dated May 1, 2019, and pay interest annually on May 1. Financial statements are prepared annually on December 31 Instructions (a) Prepare the journal entry to record the issuance of the bonds. (b) Prepare the adjusting entry to record the accrual of interest on December 31,2019 (c) Show the balance sheet presentation on December 31,2019. (d) Prepare the journal entry to record payment of interest on May 1, 2020. Int. exp. $18,000 (e) Prepare the adjusting entry to record the accrual of interest on December 31, 2020 () Assume that on January 1, 2021, Herron pays the accrued bond interest and calls the bonds at 102. Record the payment of interest and redemption of the bonds. Loss $12,000

Explanation / Answer

c) Balance sheet presentation on december 31,2019

No Date accounts & explanation debit Credit (a) May 1,2019 Cash 600000 Bonds payable 600000 (To record issue bonds payable) (b) Dec 31,2019 Interest expense (600000*9%*8/12) 36000 Interest payable 36000 (To record accured interest)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.