Question
The board of directors of Allen Services Inc. authorized the issuance of $560,000 face value, 20-year, 5 percent bonds dated April 1, 2022, and maturing
The board of directors of Allen Services Inc. authorized the issuance of $560,000 face value, 20-year, 5 percent bonds dated April 1, 2022, and maturing on April 1, 2042. Interest is payable semiannually on April 1 and October 1. Allen uses the calendar year as its fiscal year. The bond transactions that occurred in 2022 and 2023 follow.
| DATE | TRANSACTIONS FOR 2022 | ||
| Apr. | 1 | Issued $336,000 of bonds at face value. | |
| Oct. | 1 | Paid the semiannual interest on the bonds issued. | |
| Dec. | 31 | Recorded the adjusting entry for the accrued bond interest. | |
| 31 | Closed the Bond Interest Expense account to the Income Summary account. | ||
| DATE | TRANSACTIONS FOR 2023 | ||
| Jan. | 1 | Reversed the adjusting entry made on December 31, 2022. | |
| Apr. | 1 | Issued $112,000 of bonds at face value. | |
| 1 | Paid the interest for six months on the bonds previously issued. | ||
| Oct. | 1 | Paid the interest for six months on the outstanding bonds. | |
| Dec. | 31 | Recorded the adjusting entry for the accrued bond interest. | |
| 31 | Closed the Bond Interest Expense account to the Income Summary account. | ||
Recorded the adjusting entry for the accrued bond interest.
| Dec 31, 2023 | general journal | debit | credit |
Closed the Bond Interest Expense account to the Income Summary account.
| Dec 31, 2023 | general journal | debit | credit |
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
13th Edition
978-0697789938
