On August 1, 2017, Cheyenne Corp. issued S484 ,800, 6%, 10-year bonds at face va

Question

On August 1, 2017, Cheyenne Corp. issued S484 ,800, 6%, 10-year bonds at face value. Interest is payable annually on August 1, Cheyenne's year-end is December 31 (a) Your answer is correct. Prepare 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 Aug. 1 484800 Bonds Payable 484800 SHOW LIST OF ACCOUNTS LINK TO TEXT (b) Your answer is correct. Prepare 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 manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Interest Expense 12120 Interest Payable 12120 SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT (c) Prepare journal entry to record the payment of interest on August 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1

Explanation / Answer

Aug-01 Interest expense 16968 =484800*6%/12*7 Interest payable 12120         Cash 29088

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