On February 1, 2021, Strauss-Lombardi issued 8% bonds, dated February 1, with a face amount...
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On February 1, 2021, Strauss-Lombardi issued 8% bonds, dated February 1, with a face amount of $960,000. The bonds sold for $871,673 and mature on January 31, 2041 (20 years). The market yield for bonds of similar risk and maturity was 9%. Interest is paid semiannually on July 31 and January 31. Strauss-Lombardis 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.)
No Debit Credit 1 Date General Journal February 01, 2021 Cash Discount on bonds payable Bonds payable 871,673 88,327 960,000 2 July 31, 2021 39,225 Interest expense Discount on bonds payable Cash 3 December 31, 2021 Interest expense Discount on bonds payable Interest payable 4 January 31, 2022 Interest expense Interest payable Cash
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