Exercise 10-8 On August 1 2017, Ayayal Corp ssued $506,400 7%, 10-year bonds at

Question

Exercise 10-8 On August 1 2017, Ayayal Corp ssued $506,400 7%, 10-year bonds at ace value. Interest is payable annually on Aug st 1. A a a s year-end s December 31 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 SHOW LIST OF ACCOUNTS 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 SHOW LIST OF ACCOUNTS

Explanation / Answer

A) BANK A/C DR 506400 7% DEBENTURES A/C CR 506400 B) INTEREST A/C DR 14770 OUTSTANDING INTEREST A/C CR 14770 C) OUTSTANDING INTEREST A/C DR 14770 INTEREST A/C DR 20678 BANK A/C CR 35448

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