On February 1, 2021, Strauss-Lombardi issued 10% bonds, dated February 1, with a face amount...
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On February 1, 2021, Strauss-Lombardi issued 10% bonds, dated February 1, with a face amount of $810,000. The bonds sold for $745,010 and mature on January 31, 2041 (20 years). The market yield for bonds of similar risk and maturity was 11%. Interest is paid semiannually on July 31 and January 31. Strauss-Lombardi's fiscal year ends December 31. Required: 1. to 4. Prepare the journal entries to record their issuance by Strauss-Lombardi on February 1, 2021, interest on July 31, 2021 (at the effective rate), adjusting entry to accrue interest on December 31, 2021 and interest on January 31, 2022. (Do not round your intermediate calculations and round your final answers to nearest whole dollar. If no entry is required for a transaction/event select "No journal entry required" in the first account field.) Credit No Date General Journal Debit February 01, 2021 Cash 1 745,010 Discount on bonds payable 64,990 Bonds payable 810,000 Interest expense July 31, 2021 90,976 50,476 Discount on bonds payable Cash 40,500 December 31, 202 Interest expense 36,460 3 Discount on bonds payable 2,710 Cash 33,750 7,292 January 31, 2022 Interest expense Interest payable 4 33,750 542 Discount on bonds payable Cash 40,500
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