On the first day of the fiscal year, a company issues a $980,000, 7%, five-year bond that pays semiannual interest of $34,300 ($980,000 7% 1/2), receiving cash of $884,176.

Required: Journalize the entry to record the issuance of the bonds. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

General Ledger

ASSETS

110 Cash

111 Petty Cash

112 Accounts Receivable

113 Allowance for Doubtful Accounts

114 Notes Receivable

115 Interest Receivable

121 Merchandise Inventory

122 Supplies

131 Prepaid Insurance

140 Land

151 Building

152 Accumulated Depreciation-Building

153 Equipment

154 Accumulated Depreciation-Equipment

LIABILITIES

210 Accounts Payable

221 Salaries Payable

231 Sales Tax Payable

241 Notes Payable

242 Interest Payable

251 Bonds Payable

252 Discount on Bonds Payable

253 Premium on Bonds Payable

EQUITY

310 Owner, Capital

311 Owner, Drawing

312 Income Summary

REVENUE

410 Sales

610 Interest Revenue

611 Gain on Redemption of Bonds

EXPENSES

510 Cost of Merchandise Sold

511 Bad Debt Expense

512 Credit Card Expense

513 Cash Short and Over

521 Salaries Expense

531 Advertising Expense

532 Delivery Expense

533 Repairs Expense

534 Rent Expense

535 Insurance Expense

536 Supplies Expense

551 Depreciation Expense-Building

552 Depreciation Expense-Equipment

590 Miscellaneous Expense

710 Interest Expense

711 Loss on Redemption of Bonds