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Issuing Bonds at Face Amount

On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $650,000, 7%, 10-year bond that pays semiannual interest of $22,750 ($650,000 7% year), receiving cash of $650,000.

(a) Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank.

	Accounts PayableCashInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Accounts PayableBonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -

(b) Journalize the entry to record the first interest payment on June 30. If an amount box does not require an entry, leave it blank.

	Accounts PayableBonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Accounts PayableBonds PayableCashInterest PayablePremium on Bonds Payable	- Select -	- Select -

(c) Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not require an entry, leave it blank.

	Accounts PayableBonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Accounts PayableCashInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -

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