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: E10-8

Answer

Step1: 2010 Sept. 01 Cash 600,000 dollars Bonds Payable 600,000 dollars Step2: Dec. 31 Bond Interest Expense 16,000 dollars Bonds Interest Payable 16,000 dollars Step3: 2011 Sept. 01 Bonds Interest payable 16,000 dollars Bonds interest expense 32,000 dollars Cash 48,000 dollars

Work Step by Step

Step1: To record sale of bonds at face value Step2: To accrue bond interest for the period September-December 2010 Step3: To record payment of bond interest for the year ended September 2011
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