On March 1, 2021, Stratford Lighting issued 14% bonds, dated March 1, with a face amount of $750,000. The bonds sold for $744,000 and mature on February 28, 2041 (20 years). Interest is paid semiannually on August 31 and February 28. Stratford uses the straight-line method and its fiscal year ends December 31. Required: 1. to 4. Prepare the journal entries to record the issuance of the bonds by Stratford Lighting on March 1, 2021, interest on August 31, 2021, accrued interest on December 31, 2021 and interest on February 28, 2022. (Do not round your intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
On March 1, 2021, Stratford Lighting issued 14% bonds, dated March 1, with a face amount of $750,000. The bonds sold for $744,000 and mature on February 28, 2041 (20 years). Interest is paid semiannually on August 31 and February 28. Stratford uses the straight-line method and its fiscal year ends December 31. Required: 1. to 4. Prepare the journal entries to record the issuance of the bonds by Stratford Lighting on March 1, 2021, interest on August 31, 2021, accrued interest on December 31, 2021 and interest on February 28, 2022. (Do not round your intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...
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Transcribed Image Text:On March 1, 2021, Stratford Lighting issued 14% bonds, dated March 1, with a face amount of $750,000. The
bonds sold for $744,000 and mature on February 28, 2041 (20 years). Interest is paid semiannually on
August 31 and February 28. Stratford uses the straight-line method and its fiscal year ends December 31.
Required:
1. to 4. Prepare the journal entries to record the issuance of the bonds by Stratford Lighting on March 1,
2021, interest on August 31, 2021, accrued interest on December 31, 2021 and interest on February 28,
2022. (Do not round your intermediate calculations. If no entry is required for a transaction/event, select
"No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
2
3
4
>
Record the interest on August 31, 2021.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
August 31, 2021
Interest expense
Discount on bonds payable
Cash
Record entry
Clear entry
View general journal
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