Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 10 - Reporting and Analyzing Liabilities - Exercises: E10-11

Answer

Step1: Jan. 01 Cash 400,000 dollars Bonds Payable 400,000 dollars Step2: Dec. 31 Bond Interest Expense 32,000 dollars Bonds Interest Payable 32,000 dollars Step3: 2011 Jan. 01 Bonds Interest payable 32,000 dollars Cash 32,000 dollars Step4: 2031 Jan.01 Bonds Payable 400,000 dollars Cash 400,000 dollars

Work Step by Step

Step1: To record sale of bonds at face value Step2: To accrue bond interest for the period January -December Step3: To record payment of bond interest for the year ended December Step4: To record redemption of bonds at maturity
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