On January 1, 2017, Klosterman Company issued $470,000, 11%, 10-year bonds at face value. Interest is payable annually on January 1.

a) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit

Jan. 1 cash

bonds payable

b) Prepare the journal entry to record the accrual of interest on December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date Account Titles and Explanation Debit Credit

Dec 31 Interest Expense

Interest payable

c) Prepare the journal entry to record the payment of interest on January 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

DateAccount Titles and Explanation DebitCredit

jan 1 Interest payable

cash