Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, the first day of the fiscal year, a company issues a $2,000,000, 8%, five-year bond that pays semiannual interest of $80,000 ($2,000,000

On January 1, the first day of the fiscal year, a company issues a $2,000,000, 8%, five-year bond that pays semiannual interest of $80,000 ($2,000,000 x 8% x ), receiving cash of $2,170,604.

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

CHART OF ACCOUNTS

ASSETS

110Cash

111Petty Cash

121Accounts Receivable

122Allowance for Doubtful Accounts

126Interest Receivable

127Notes Receivable

131Merchandise Inventory

141Office Supplies

191Land

194Office Equipment

195Accumulated Depreciation-Office Equipment

LIABILITIES

210Accounts Payable

221Salaries Payable

231Sales Tax Payable

232Interest Payable

241Notes Payable

251Bonds Payable

252Discount on Bonds Payable

253Premium on Bonds Payable

EQUITY

311Common Stock

312Paid-In Capital in Excess of Par-Common Stock

315Treasury Stock

321Preferred Stock

322Paid-In Capital in Excess of Par-Preferred Stock

331Paid-In Capital from Sale of Treasury Stock

340Retained Earnings

351Cash Dividends

352Stock Dividends

390Income Summary

REVENUE

410Sales

610Interest Revenue

611Gain on Redemption of Bonds

EXPENSES

510Cost of Merchandise Sold

515Credit Card Expense

516Cash Short and Over

522Office Salaries Expense

531Advertising Expense

532Delivery Expense

533Repairs Expense

535Rent Expense

536Insurance Expense

537Office Supplies Expense

541Bad Debt Expense

562Depreciation Expense-Office Equipment

590Miscellaneous Expense

710Interest Expense

711Loss on Redemption of Bonds

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Chapters 1-13

Authors: John Price

14th Edition

007763991X, 9780077639914

More Books

Students also viewed these Accounting questions

Question

8. What values do you want others to associate you with?

Answered: 1 week ago