Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $360,000 of 10-year, 8% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.

Journalize the entries to record the following selected transactions for the current year. Refer to the Chart of Accounts for exact wording of account titles.

May

1

Issued the bonds for cash at their face amount.

Nov.

1

Paid the interest on the bonds.

Dec.

31

Recorded accrued interest for two months.

CHART OF ACCOUNTS

Thomson Co.

General Ledger

ASSETS

110

Cash

111

Petty Cash

121

Accounts Receivable

122

Allowance for Doubtful Accounts

126

Interest Receivable

127

Notes Receivable

131

Merchandise Inventory

141

Office Supplies

142

Store Supplies

151

Prepaid Insurance

191

Land

192

Store Equipment

193

Accumulated Depreciation-Store Equipment

194

Office Equipment

195

Accumulated Depreciation-Office Equipment

LIABILITIES

210

Accounts Payable

221

Salaries Payable

231

Sales Tax Payable

232

Interest Payable

241

Notes Payable

251

Bonds Payable

252

Discount on Bonds Payable

253

Premium on Bonds Payable

EQUITY

311

Common Stock

312

Paid-In Capital in Excess of Par-Common Stock

315

Treasury Stock

321

Preferred Stock

322

Paid-In Capital in Excess of Par-Preferred Stock

331

Paid-In Capital from Sale of Treasury Stock

340

Retained Earnings

351

Cash Dividends

352

Stock Dividends

390

Income Summary

REVENUE

410

Sales

610

Interest Revenue

611

Gain on Redemption of Bonds

Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

DATE

DESCRIPTION

POST. REF.

DEBIT

CREDIT

ASSETS

LIABILITIES

EQUITY

1

2

3

4

5

Adjusting Entries

6

7

Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $360,000 of 10-year, 8% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions for the current year. Refer to the Chart of Accounts for exact wording of account titles. May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec. 31 Recorded accrued interest for two months. CHART OF ACCOUNTS Thomson Co. General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Petty Cash 610 Interest Revenue 121 Accounts Receivable 611 Gain on Redemption of Bonds 122 Allowance for Doubtful Accounts 126 Interest Receivable 127 Notes Receivable 131 Merchandise Inventory 141 Office Supplies 142 Store Supplies 151 Prepaid Insurance 191 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221_Salaries Payable