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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Burris Corporation is authorized to issue $800,000 of 9% bonds. Interest on the bonds is payable semiannually; the bonds are dated January 1, 2019, and are due December 31, 2023.

Chapter 14, Problem 3E, Burris Corporation is authorized to issue 800,000 of 9% bonds. Interest on the bonds is payable

a.

To determine

Prepare journal entry to record sold the bonds at par plus accrued interest.

Explanation

Bonds:

Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Prepare journal entry to record sold the bonds at par plus accrued interest.

DateAccount titles and ExplanationDebitCredit
April 1, 2019Cash (balancing figure)$818,000  
      Interest expense (1) $18,000
      Bonds payable $800,000
 (To record sale of bonds at par value plus accrued interest)  

Table (1)

Working notes:

(1)Calculate interest expense...

b.

To determine

Prepare journal entry to record first interest payment as on 30th June 2019.

c.

To determine

Prepare journal entry to record second interest payment as on 31st December 2019.

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