Chapter 11, Problem 11.2EX

Entries for issuing bonds

Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $900,000 of 10-year, 7% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions for the current year:

May 1.	Issued the bonds for cash at their face amount.
Nov. 1.	Paid the interest on the bonds.
Dec. 31.	Recorded accrued interest for two months.