On Jan. 1, Year 1, Foxcroft Inc. issued 120 bonds with a face value of $1,080 for $132,600. The bonds had a stated rate of 8% and paid interest semi-annually. What is the journal entry to record the issuance of the bonds? If an amount box does not require an entry, leave it blank.

On Jan. 1, Year 1, Foxcroft Inc. issued 120 bonds with a face value of $1,080 for $132,600. The bonds had a stated rate of 8% and paid interest semi-annually. What is the journal entry to record the issuance of the bonds? If an amount box does not require an entry, leave it blank.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 7EA: On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The...

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Question

On Jan. 1, Year 1, Foxcroft Inc. issued 120 bonds with a face value of $1,080 for $132,600. The bonds had a stated rate of 8% and paid interest semi-annually.

What is the journal entry to record the issuance of the bonds? If an amount box does not require an entry, leave it blank.

Jan. 1

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

Expert Solution

Step 1

Bonds are issued to fulfil the requirement of the capital of the company. It represents the liability of the company on which a fixed percentage of interest would require to be given.

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