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 - Brief Exercises: BE10-6


a) 2010 Jan.1 - Cash - 2,000,000 dollars (Debit) Bonds Payable - 2,000,000 dollars (Credit) b) Dec.31 - Bonds interest expense - 140,000 dollars (Debit) Bonds interest payable - 140,000 dollars (Credit) c) 2011 Jan.1 - Bonds interest payable - 140,000 dollars (Debit) Cash - 1400,00 dollars (Credit)

Work Step by Step

a) To record sale of bonds at face value b) To accrue bond interest c) To record payment of bond interest
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