On the first day of the fiscal year, a company issues a $950,000, 10%, five-year bond that pays semiannual interest of $47,500 ($950,000 × 10% × 1/2), receiving cash of $884,174. Required: Journalize the entry to record the issuance of the bonds. Refer to the Chart of Accounts for exact wording of account titles.CHART OF ACCOUNTSGeneral Ledger ASSETS110Cash111Petty Cash112Accounts Receivable113Allowance for Doubtful Accounts114Notes Receivable115Interest Receivable121Merchandise Inventory122Supplies131Prepaid Insurance140Land151Building152Accumulated Depreciation-Building153Equipment154Accumulated Depreciation-Equipment LIABILITIES210Accounts Payable221Salaries Payable231Sales Tax Payable241Notes Payable242Interest Payable251Bonds Payable252Discount on Bonds Payable253Premium on Bonds Payable EQUITY310Owner, Capital311Owner, Drawing312Income Summary REVENUE410Sales610Interest Revenue611Gain on Redemption of Bonds EXPENSES510Cost of Merchandise Sold511Bad Debt Expense512Credit Card Expense513Cash Short and Over521Salaries Expense531Advertising Expense532Delivery Expense533Repairs Expense534Rent Expense535Insurance Expense536Supplies Expense551Depreciation Expense-Building552Depreciation Expense-Equipment590Miscellaneous Expense710Interest Expense711Loss on Redemption of Bonds Journalize the entry to record the issuance of the bonds on July 1. Refer to the Chart of Accounts for exact wording of account titles.PAGE 1 JOURNAL DATEDESCRIPTIONPOST. REF.DEBITCREDIT1 2 3

Journal entry: It is a systematic record of a financial transaction of an organization recorded in chronological order.Pass necessary journal entry.

Answered: Journalize the entry to record the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On the first day of the fiscal year, a company issues a $950,000, 10%, five-year bond that pays semiannual interest of $47,500 ($950,000 × 10% × 1/2), receiving cash of $884,174.

	Required:
	Journalize the entry to record the issuance of the bonds. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTSGeneral Ledger

	ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
113	Allowance for Doubtful Accounts
114	Notes Receivable
115	Interest Receivable
121	Merchandise Inventory
122	Supplies
131	Prepaid Insurance
140	Land
151	Building
152	Accumulated Depreciation-Building
153	Equipment
154	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Salaries Payable
231	Sales Tax Payable
241	Notes Payable
242	Interest Payable
251	Bonds Payable
252	Discount on Bonds Payable
253	Premium on Bonds Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue
611	Gain on Redemption of Bonds

	EXPENSES
510	Cost of Merchandise Sold
511	Bad Debt Expense
512	Credit Card Expense
513	Cash Short and Over
521	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Repairs Expense
534	Rent Expense
535	Insurance Expense
536	Supplies Expense
551	Depreciation Expense-Building
552	Depreciation Expense-Equipment
590	Miscellaneous Expense
710	Interest Expense
711	Loss on Redemption of Bonds

Journalize the entry to record the issuance of the bonds on July 1. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3

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