n January 1, Innovative Solutions, Inc, issued $170,000 in bonds at face value.

Question

n January 1, Innovative Solutions, Inc, issued $170,000 in bonds at face value. The bonds have a stated interest rate of 7 percent. The bonds mature in 10 years and pay interest once per year on December 31 Required: 1, 2& 3 on ately after December 31, early retirement of the bonds. Assume the bonds were retired i the first interest payment at a quoted price of 102. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) ournal entry worksheet 2 Record the issuance of bonds of $170,000 at face value. Date General Journal Debit Credit

Explanation / Answer

Date Account titles & explanations Debit Credit 1-Jan Cash 170,000 bonds payable 170,000 31-Dec interest expense 11900 cash 11,900 (170,000*7%) 31-Dec Bonds payable 170,000 loss on retirement 3,400 cash 170,000*1.02) 173400

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