Entries for issuing bonds Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $300,000 of 25-year, 9% 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. November 1. Paid the interest on the bonds. December 31. Recorded accrued interest for 2 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. 88 May 1 Nov. 1 Cash Bonds Payable Interest Expense Cash Dec. 31 Interest Expense Interest Payable Show Me How ✓ ✓
Entries for issuing bonds Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $300,000 of 25-year, 9% 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. November 1. Paid the interest on the bonds. December 31. Recorded accrued interest for 2 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. 88 May 1 Nov. 1 Cash Bonds Payable Interest Expense Cash Dec. 31 Interest Expense Interest Payable Show Me How ✓ ✓
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Chap 11
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May 1
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.
Nov. 1
Entries for issuing bonds
Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $300,000 of 25-year, 9% 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.
November 1.
Paid the interest on the bonds.
December 31. Recorded accrued interest for 2 months.
Cash
Bonds Payable
Interest Expense
✓
Cash
Dec. 31 Interest Expense
Interest Payable
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Bonds payable is always recorded at face value. The semi-annual cash payment to bondholders is the interest expense when bonds are sold at face value. As with notes
payable, interest must be accrued for the period between the last interest payment period to the end of the fiscal year.
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