Question
The board of directors of Allen Services Inc. authorized the issuance of $400,000 face value, 20-year, 6 percent bonds dated April 1, 2019, and maturing
The board of directors of Allen Services Inc. authorized the issuance of $400,000 face value, 20-year, 6 percent bonds dated April 1, 2019, and maturing on April 1, 2039. 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 2019 and 2020 follow.
| DATE | TRANSACTIONS FOR 2019 | |
| Apr. | 1 | Issued $260,000 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 2020 | |
| Jan. | 1 | Reversed the adjusting entry made on December 31, 2019. |
| Apr. | 1 | Issued $140,000 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. | |
Required: Record the transactions in general journal form. Analyze: Based on the transactions given, what is the balance in the Bonds Payable account on December 31, 2019?
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Food And Beverage Cost Control
Authors: Jack E. Miller, Lea R. Dopson, David K. Hayes
3rd Edition
0471273546, 978-0471273547
