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The board of directors of Pictures Plus authorized the issue of $9,000,000 of 7%, 20-year bonds payable. The semiannual interest dates are May 31 and
The board of directors of Pictures Plus authorized the issue of $9,000,000 of 7%, 20-year bonds payable. The semiannual interest dates are May 31 and Nove The bonds are issued on May 31, 2018, at par. Read the requirements. Requirement 1. Journalize the transactions a through d. (Record debits first, then credits. Exclude explanations from journal entries.) a. Issuance of half of the bonds on May 31, 2018 Journal Entry Date 2018 Accounts Debit Credit May 31 Cash 4500000 Bonds Payable 4500000 b. Payment of interest on November 30, 2018 Date Debit Credit Journal Entry 2018 Accounts 30 Interest Expense Cash Nov 157500 157500 c. Accrual of interest on December 31, 2018 Journal Entry Debit Credit Date Dec 2018 Accounts 31 Interest Expense Interest Payable 26250 26250 d. Payment of interest on May 31, 2019 Date Debit Credit May Journal Entry 2019 Accounts 31 Interest Expense Interest Payable Cash 131250 26250 157500 Requirement 2. Report interest payable and bonds payable as they would appear on the company's balance sheet at December 31, 2018. Current liabilities: Interest payable 26250 Long-term liabilities: Bonds payable 4500000
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