On January 1, 2016, the first day of the fiscal year, a company issues a $300,000, 9%, 10-year bond that pays semiannual interest of $13,500 ($300,000 x 9% x year), receiving cash of $300,000.

Journalize the entries to record (a) the issuance of the bonds, (b) the first interest payment on June 30, and (c) the payment of the principal on the maturity date. Be sure to include the year in the date for (a) and (c). Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

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
191	Land
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

Journalize the entries to record (a) the issuance of the bonds, (b) the first interest payment on June 30, and (c) the payment of the principal on the maturity date. Be sure to include the year in the date for (a) and (c). Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6