Question 2 (20%)

The board of directors of Portraits Plus authorizes the issue of 4,000,000 of 8%, 15-year bonds payable. The semi-annual interest dates are May 31 and November 30. The bonds are issued on May 31, 20X0, at par.

Requirements: 1). Journalize the following transactions: a. Issuance of half of the bonds on May 31, 20X0. b. Payment of interest on November 30, 20X0. c. Accrual of interest on December 31, 20X0. d. Payment of interest on May 31, 20X1.

2). Report the interest payable and bonds payable as they would appear on the Portraits Plus Balance Sheet at December 31, 20X0