S9-8. (Learning Objective 2: Journalizing basic bond payable transactions; bonds issued at par) Derp Corp. issued 15-year
Question:
S9-8. (Learning Objective 2: Journalizing basic bond payable transactions; bonds issued at par) Derp Corp. issued 15-year bonds payable with a face amount of $70,000, when the market interest rate was 6.5%. The bonds were issued at par. Assume that the accounting year of Derp ends on December 31. Journalize the following transactions for Derp. Include an explanation for each entry.
a. Issuance of the bonds payable at par on July 1, 20X0.
b. Accrual of interest expense on December 31, 20X0 (rounded to the nearest dollar).
c. Payment of cash interest on January 1, 20X1.
d. Payment of the bonds payable at maturity.
Step by Step Answer:
Financial Accounting International Financial Reporting Standards Global Edition
ISBN: 9781292211145
11th Edition
Authors: Charles T. Horngren, C. William Thomas, Wendy M. Tietz, Themin Suwardy, Walter T. Harrison