On December 5, Kelso Corporation deposited a deed of trust with the trustee of its bondholders authorizing it to issue $1,000,000 of 10%, 20 year bonds, dated January 1, 1981 and upon which interest is payable each June 30 and December 31.

1. Complete the 1981 entries for this bond issue.

2. Post to the T-account the portions of the above entries that affect bond interest expense and complete the following statement.

Bond interest Expense

Kelso Corporations 1981 income statement should show $_________ of bond interest and its 1982 statement should show $________ or bond interest expense.

date account titles and explanation Dr Jan1981 30-Jun 31-Dec