Escape to Egypt Travel Inc. issues $4,000,000 of five-year, 4% bonds dated January 1, 2021. Interest is
Question:
Escape to Egypt Travel Inc. issues $4,000,000 of five-year, 4% bonds dated January 1, 2021. Interest is payable on January 1 and July 1 each year. The proceeds realized from the issue were the $3,900,000 sales price less the $40,000 fee charged by Escape’s investment bank. Escape’s year-end is December 31.
Required:
Prepare journal entries to record:
a. The issuance of the bonds.
b. Payment of interest and related amortization on July 1, 2021.
c. Accrual of interest and related amortization on December 31, 2021.
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a The journal entries to record the issuance of the bonds is as follows i Prepaid expense for 40000 ...View the full answer
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