Copyright

Pizza Pier issues 9%. 9-year bonds with a face amount of $70,000 on January 1, 2015. The market...

Question:

Pizza Pier issues 9%. 9-year bonds with a face amount of $70,000 on January 1, 2015. The market interest rate for bonds of similar risk and maturity is also 9%. Interest is paid semiannually on June 30 and December 31.

1. Record the bond issue. (Omit the "$" sign in your response

Date General Journal Debit Credit
Jan. 1, 2015
 

2. Record the first interest payment on June 30, 2015. (Do not round intermediate calculations. Omit the "$" sign in your response

Date General Journal Debit Credit
Jun. 30, 2015
 

Bond Issue Calculations:

When bonds are issued, the issuer incurs a long term liability to pay an amount at maturity and interest payments during the period of the issue.

Accounting entries must be made to record the issuance of the bonds and to record the interest payments and accrued interest at balance date.

Answer and Explanation:

(a). The following journal is made to record the issuance of bonds:

DrCash70,0000
CrBonds Payable70,000
To record the issue of bonds

This journal...

See full answer below.

Become a www.heiqigong.com member to unlock this answer! Create your account

View this answer

Learn more about this topic:

Loading...
Bonds: Types, Characteristics and Issuing Procedures

from Accounting 101: Financial Accounting

Chapter 10 / Lesson 7
11K

Related to this Question

Explore our homework questions and answers library

福建福彩网 临海市 湖北省 钟祥市 大同市 兰溪市 湘潭市 松滋市 铁力市 彭州市 厦门市 宜春市 邹城市 彭州市 山东省 金昌市 平度市 海南省 双滦区 忻州市 葫芦岛市 十堰市 平度市 潞城市 临沂市 阜新市 普兰店市 汉川市 兴城市 都匀市 枣庄市 安达市 烟台市 高邮市 梅河口市 江油市 白银市 丰城市 孝义市 石首市 池州市 葫芦岛市 福建省 金华市 梅河口市 胶州市 上虞市 大石桥市 江阴市 吉首市 大庆市 铁力市 深州市 山西省 厦门市 项城市 永州市 原平市 明光市 耒阳市