Bonds Issued at Face Value

Ito Co. issued the following bonds:

Date of issue and sale:	April 1, 20-1
Principal amount:	$300,000
Sale price of bonds:	100
Denomination of bonds:	$5,000
Life of bonds:	5 years
Stated rate:	6%, payable semiannually on September 30 and March 31

Required:

Prepare journal entries for the transactions below. If an amount box does not require an entry, leave it blank.

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a. Issuance of the bonds.

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ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-1 Apr. 1	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	1
2	blank	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	2
3	blank	blank	blank	blank	blank	blank	3

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b. Interest payment on the bonds on September 30, 20-1.

Page: blank

ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-1 Sept. 30	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	1
2	blank	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	2
3	blank	blank	blank	blank	blank	blank	3

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c. Year-end adjustment on the bonds for 20-1.

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ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-1 Dec. 31	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	1
2	blank	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	2
3	blank	blank	blank	blank	blank	blank	3

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d. Reversing entry for the beginning of 20-2.

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ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-2 Jan. 1	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	1
2	blank	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	2
3	blank	blank	blank	blank	blank	blank	3

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e. Interest payments on the bonds for 20-2 (March 31 and September 30).

Page: blank

ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-2 Mar. 31	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	1
2	blank	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	2
3	blank	blank	blank	blank	blank	blank	3
4	Sept. 30	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	4
5	blank	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	5
6	blank	blank	blank	blank	blank	blank	6

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f. Redemption at maturity.

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ROW NUMBER	DATE	ACCOUNT TITLE	DOC. NO.	POST. REF.	DEBIT	CREDIT	ROW NUMBER
1	20-6 Apr. 1	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	1
2	blank	Bond Interest ExpenseBond Interest PayableBond Interest ReceivableBonds PayableCash	blank	blank	- Select -	- Select -	2
3	blank	blank	blank	blank	blank	blank	3