Issuing Bonds at a Face Amount On January 1, the first day of the fiscal...
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Issuing Bonds at a Face Amount On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $1,000,000, 8%, 10-year bond that pays semiannual interest of $40,000 ($1,000,000 8% x 12 year), receiving cash of $1,000,000. (a) Journalize the entry to record the issuance of the bonds. Cash Bonds Payable Feedback (b) Journalize the entry to record the first interest payment on June 30. Interest Expense Cash Feedback (c) Journalize the entry to record the payment of the principal on the maturity date. Bonds Payable Cash Entries for Issuing Bonds Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $720,000 of 25-year, 11% bonds on May 1 of the current year at face value,, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec. 31 Recorded accrued interest for two months. Journalize the entries to record the above selected transactions for the current year. Cash May 1 Bonds Payable Nov. 1 Interest Expense Cash Interest Expense Dec. 31 Interest Payable
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