The board of directors of Nolen Products, Inc., authorized the issuance of $1,000,000 face value, 8 percent bonds dated April 1, 2016. The bonds will mature on April 1, 2026. The interest is payable semiannually on April 1 and October 1. The bond transactions that occurred in 2016 and 2017 are shown below.

INSTRUCTIONS

Record the transactions below in general journal form. Use the account names given in the chapter.

DATE ___TRANSACTIONS FOR 2016

April 1 Issued $600,000 of bonds at face value.

Oct. 1 Paid the semiannual bond interest on the outstanding bonds.

Dec. 31 Recorded the adjusting entry to accrue the interest on the bonds issued.

31 Closed the Bond Interest Expense account to the Income Summary account.

DATE TRANSACTIONS FOR 2017

Jan. 1 Reversed the adjusting entry of December 31, 2016.

April 1 Paid the semiannual bond interest.

Oct. 1 Paid the semiannual bond interest.

1 Issued $400,000 of bonds at face value.

Dec. 31 Recorded the adjusting entry to accrue the interest on all bonds issued.

31 Closed the Bond Interest Expense account to the Income Summary account.

Analyze:

What total bond interest would have been reported on the income statement for the year ended December 31, 2016?