Accounting for bonds (Learning Objective 5) 15–20 min.

Allied, Corp., issued 8%, five-year bonds payable with a maturity value of $50,000 at par on May 1, 2014. Assume that the fiscal year ends on December 31. Journalize the following transactions and include an explanation for each entry. Round calculations to the nearest dollar.

a. Issuance of the bonds payable on May 1, 2014.

b. Payment of the first semiannual interest amount on November 1, 2014.

c. Accrual of interest expense on December 31, 2014.

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