value 2.50 points E10-8 Preparing Journal Entries to Record Issuance of Bonds at

Question

value 2.50 points E10-8 Preparing Journal Entries to Record Issuance of Bonds at Face Value, Payment of Interest, On January 1, Innovative Solutions, Inc. issued $290,000 in bonds at face value. The bonds have a stated interest rate of 6 percent. The bonds mature in 10 years and pay interest once per year on December 31. Required: 1,2&3. Complete the required journal entries to record the bond issuance, interest payment on December 31, early retirement of the bonds. Assume the bonds were retired immediately after the first interest payment at a quoted price of 101. (If no entry is required for a transactionlevent, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the issuance of bonds of $290,000 at face value. Note: Enter debits before credits. Date General Journal Debit Credit Januarv 01

Explanation / Answer

Jan-01 Cash 290000       Bonds payable 290000 Dec-31 Interest expense 17400 =290000*6%        Cash 17400 Dec-31 Bonds payable 290000 Loss on redemption of bonds 2900        Cash 292900

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