The Grill, Inc., issued $300,000 of 10-year, 6 percent bonds on July 1, 2013, at 102. Interest

Question:

The Grill, Inc., issued $300,000 of 10-year, 6 percent bonds on July 1, 2013, at 102. Interest is payable in cash semiannually on June 30 and December 31.

Required

a. Prepare the journal entries to record issuing the bonds and any necessary journal entries for 2013 and 2014. Post the journal entries to T-accounts.

b. Prepare the liabilities section of the balance sheet at the end of 2013 and 2014.

c. What amount of interest expense will Pet report on the financial statements for 2013 and 2014?

d. What amount of cash will Pet pay for interest in 2013 and 2014?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...