(Entries for Bond Transactions) Presented below are two independent situations. 1. On January 1, 2017 Simon Company issued $200,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1 and January 1 2. On June 1, 2017, Garfunkel Company issued $100,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest interest is payable semiannually on July 1 and January 1. Instructions: For each of these two independent situations, prepare journal entries to record the following: 1) The issuance of the bonds 2) The payment of interest on July 1 3) The accrual of interest on December 31

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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(Entries for Bond Transactions) Presented below are two independent situations.

1. On January 1, 2017 Simon Company issued $200,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1 and January 1

2. On June 1, 2017, Garfunkel Company issued $100,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest interest is payable semiannually on July 1 and January 1.

Instructions: For each of these two independent situations, prepare journal entries to record the following:

1) The issuance of the bonds

2) The payment of interest on July 1

3) The accrual of interest on December 31

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