Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On the first day of the fiscal year, a company issues an $1,350,000, 11%, five-year bond that pays semiannual interest of $74,250 ($1,350,000 x 11%
On the first day of the fiscal year, a company issues an $1,350,000, 11%, five-year bond that pays semiannual interest of $74,250 ($1,350,000 x 11% x ), receiving cash of $1,512,610.
Journalize the bond issuance on January 1. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTSGeneral 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 |
REVENUE | |
410 | Sales |
610 | Interest Revenue |
611 | Gain on Redemption of Bonds |
EXPENSES | |
510 | Cost of Merchandise Sold |
515 | Credit Card Expense |
516 | Cash Short and Over |
522 | Office Salaries Expense |
531 | Advertising Expense |
532 | Delivery Expense |
533 | Repairs Expense |
535 | Rent Expense |
536 | Insurance Expense |
537 | Office Supplies Expense |
541 | Bad Debt Expense |
562 | Depreciation Expense-Office Equipment |
590 | Miscellaneous Expense |
710 | Interest Expense |
711 | Loss on Redemption of Bonds |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started