On January 1, 2020, Indigo Corporation issued $687,000 of 8 bonds that are due in 10 years The bonds were issued for $735,820 and pay interest each July 1 and January 1 The company uses the effective interest method Assume an effective rate of 7 (a) Prepare Indigo Corporations journal entry for the January 1 issuance (Credit account titles are automatically indented when the amount is entered Do not indent manually If no entry is required, select No Entry for the account titles and enter 0 for the amounts ) Date Account Titles and Explanation Debit Credit Jan 1 cash 735820 Bonds payable 735820 Prepare the companys journal entry for the July 1 interest payment (Round answers to 0 decimal places, e g 5,275 Credit account titles are automatically indented when the amount is entered Do not indent manually If no entry is required, select No Entry for the account titles and enter 0 for the amounts ) Date Account Titles and Explanation Debit Credit July 1 bonds payable 1726 interest expense 25754 cash 27480 List of Accounts Accumulated Depreciation Buildings Accumulated Depreciation Equipment Accumulated Depreciation Machinery Allowance for Doubtful Accounts Bad Debt Expense Bond Interest Payable Bonds Payable Buildings Cash Common Shares Cost of Goods Sold Depreciation Expense Equipment FV NI Investments FV OCI Investments Gain on Disposal of Buildings Gain on Disposal of Equipment Gain on Disposal of Machinery Gain on Redemption of Bonds Gain on Restructuring of Debt Gain on Sale of Investments Interest Expense Interest Income Interest Payable Interest Receivable Inventory Investment Property Land Loss on Disposal of Machinery Loss on Redemption of Bonds Loss on Retirement of Bonds Loss on Restructuring of Debt Loss on Sale of Investments Machinery Modification Gain or Loss Mortgage Payable No Entry Notes Payable Notes Receivable Sales Revenue Unearned Revenue Unrealized Gain or Loss Unrealized Gain or Loss OCI (c) Prepare the companys December 31 adjusting entry (Round answers to 0 decimal places, e g 5,275 Credit account titles are automatically indented when the amount is entered Do not indent manually If no entry is required, select No Entry for the account titles and enter 0 for the amounts ) Date Account Titles and Explanation Debit Credit Dec 31

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On January 1, 2020, Indigo Corporation issued $687,000 of 8% bonds that are due in 10 years. The bonds were issued for $735,820 and pay

On January 1, 2020, Indigo Corporation issued $687,000 of 8% bonds that are due in 10 years. The bonds were issued for $735,820 and pay interest each July 1 and January 1. The company uses the effective interest method. Assume an effective rate of 7%.

(a)

Prepare Indigo Corporations journal entry for the January 1 issuance. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	cash	735820
	Bonds payable		735820

Prepare the companys journal entry for the July 1 interest payment. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
July 1	bonds payable	1726
	interest expense	25754
	cash		27480

List of Accounts

Accumulated Depreciation - Buildings
Accumulated Depreciation - Equipment
Accumulated Depreciation - Machinery
Allowance for Doubtful Accounts
Bad Debt Expense
Bond Interest Payable
Bonds Payable
Buildings
Cash
Common Shares
Cost of Goods Sold
Depreciation Expense
Equipment
FV-NI Investments
FV-OCI Investments
Gain on Disposal of Buildings
Gain on Disposal of Equipment
Gain on Disposal of Machinery
Gain on Redemption of Bonds
Gain on Restructuring of Debt
Gain on Sale of Investments
Interest Expense
Interest Income
Interest Payable
Interest Receivable
Inventory
Investment Property
Land
Loss on Disposal of Machinery
Loss on Redemption of Bonds
Loss on Retirement of Bonds
Loss on Restructuring of Debt
Loss on Sale of Investments
Machinery
Modification Gain or Loss
Mortgage Payable
No Entry
Notes Payable
Notes Receivable
Sales Revenue
Unearned Revenue
Unrealized Gain or Loss
Unrealized Gain or Loss - OCI

(c)

Prepare the companys December 31 adjusting entry. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)