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
