Schlitterbahn Waterslide Company issued 34,000, 10-year, 7 percent, $100 bonds on January 1 at face value. Interest is payable each December 31. (a) The issuance of these bonds on January 1. (b) The first interest payment on December 31.

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Sidney Finley

6 June, 21:21

Schlitterbahn Waterslide Company issued 34,000, 10-year, 7 percent, $100 bonds on January 1 at face value. Interest is payable each December 31. (a) The issuance of these bonds on January 1. (b) The first interest payment on December 31.

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Rodney Mckee · Answer 1

The journal entries are shown below:

On January 1

Cash A/c Dr $3,400,000 (34,000 * $100)

To Bonds payable A/c 3,400,000

(Being issuance of the bond is recorded)

On December 31

Interest expense A/c Dr $238,000 ($3,400,000 * 7%)

To Cash A/c $238,000

(Being interest payment is recorded)