Entries for Issuing Bonds Abioye Co. produces and distributes semiconductors for use by computer manufacturers. Abioye Co. issued $720,000 of 25-year, 12% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec. 31 Recorded accrued interest for two months. Journalize the entries to record the above selected transactions for the current year. If an amount box does not require an entry, leave it blank. Round your answers to whole number. May 1 Nov. 1 Dec. 31 1I II II 1I II II
In the books of Abioye Co.
Journal Entry
Dr. Cr.
| Date | Particulars | Amount | Amount |
| May 1 |
Cash A/c Dr. To Bonds Payable Account (Being the bonds issued for cash) |
720000
|
720000 |
| November 1 |
Interest Expense A/c Dr. To Cash A/c [Refer Working Note 1] (Being the interest paid on the bonds] |
43200
|
43200 |
| December 31 |
Interest Expense A/c Dr. To Interest Payable A/c [Refer Working Note 2] (Being the accrued interest now recorded) |
14400
|
14400 |
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