Ask Question
BusinessBusiness
22 August, 23:16

On January 1, 2020, Klosterman Company issued $500,000, 10%, 10-year bonds at face value. Interest is payable annually on January 1. (a) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 (b) Prepare the journal entry to record the accrual of interest on December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 (c) Prepare the journal entry to record the payment of interest on January 1, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

+4
Answers (1)
  1. 23 August, 01:04
    0
    Answer and Explanation:

    Journal entry to record the issuance of the bonds.

    A.

    Jan 1

    Dr cash $500,000

    Cr bonds payable $500,000

    B. Journal entry to record the accrual of the interest

    Dec 31 2020

    Dr Interest expense $25,000

    Cr Interest Payable $25,000

    C. Journal entry to record the payment of interest on January 1, 2021.

    Dr Interest expense $25,000

    Cr Cash $25,0000

    Interest expense $500,000*10%*1/2=$25,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On January 1, 2020, Klosterman Company issued $500,000, 10%, 10-year bonds at face value. Interest is payable annually on January 1. (a) ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Rent control applies to about two-thirds of the private rental housing in New York City. Economic theory suggests that a below-equilibrium price established by rent control: creates a surplus of rental housing.
Answers (1)
What is the alternate name for income tax return form1040?
Answers (1)
Trading is different from bartering when it involves
Answers (1)
Monopolists want to protect their market position by - potential competitors. A common tactic is to lobby for -, such as -. Such lobbying is a form of - : use of political means to secure a - position.
Answers (1)
Chittenden Enterprises has 600 million shares outstanding. It expects earnings at the end of the year to be $ 970 million. The firm's equity cost of capital is 8 %.
Answers (1)
New Questions in Business
Which of the following are consistent with the efficient markets hypothesis? Check all that apply. You should spend several hours a day studying the business section of your local newspaper to determine which stocks to add to your investment
Answers (1)
How are resources allocated in a traditional economy?
Answers (2)
Which of these statements about the world economic system is true? everyone in core countries benefits from the world system. low-wage sweat shops are found in all countries. no one in peripheral countries benefit from the world system.
Answers (1)
If households pay $1,000 in interest payments and receive $1,200 in interest, wages equal $8,000, rental receipts on land are $200, total business profits before taxes are $2,200, depreciation is$1,750, and indirect business taxes are $1,000, then
Answers (1)
Why are entrepreneurs considered both spark plugs and catalysts of the free enterprise economy?
Answers (1)
Home » Business » On January 1, 2020, Klosterman Company issued $500,000, 10%, 10-year bonds at face value. Interest is payable annually on January 1. (a) Prepare the journal entry to record the issuance of the bonds.
Sign Up Forgot Password?