ACCT 201 Accruals and Debt Liabilities Exercises and Quiz Preparation 1. Albaco is scheduled to make an interest payment on a loan on 31 January. The interest applies for the three-month period including the months of November, December and January. The interest payment is $15,000. The accounting year ends on 31 December. Show the journal entries you will make on 31 Dec and 31 Jan to record the interest expense and payment. 2. A company closes its accounts on day 8 of a ten-day payroll period on 31 Dec. The two-week payroll is normally $60,000. It will be next paid on 3 January. Make the journal entries for 31 Dec and 3 January. 3. A company receives an equipment rental bill of $28,000 for the month ending 31 December. The bill is received on 28 December and will be paid on 16 January, Make the journal entries for 31 December and 16 January. 4. A company issues a bond with a face value of $500,000, coupon rate of 4.5% and term of five years. Make the entries to record the issue of the bond, payment of the first interest payment due and payoff of the bond at maturity under each of the following conditions: a. The market interest rate for the bond is 6.5% b. The market interest rate for the bond is 4.5% C. The market interest rate for the bond is 2.5%