---### Exercise 9-12B Part 2**Context:**On January 1, Year 1, a company issues $460,000 of 5% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 4%, the bonds will issue at $511,511.**Task:**Record the bond issue on January 1, Year 1, and the first two semiannual interest payments on June 30, Year 1, and December 31, Year 1.*Note:* If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your final answers to the nearest whole dollar.**Solution:**The following entries provide a detailed record in the General Journal:| No. | Date | General Journal | Debit | Credit ||-----|--------------|---------------------|---------|---------|| 1 | January 01 | Cash | 460,000 | || | | Bonds Payable | | 460,000 || 2 | June 30 | Interest Expense | 23,000 | || | | Cash | | 23,000 || 3 | December 31 | Interest Expense | 23,000 | || | | Cash | | 23,000 |---**Explanation of Entries:**1. **January 1:** - **Debit Cash:** The company records the cash received from issuing the bonds, amounting to $460,000. - **Credit Bonds Payable:** The company acknowledges the liability of the bonds issued.2. **June 30:** - **Debit Interest Expense:** This entry recognizes the interest expense accrued for the first half of the year. - **Credit Cash:** The company pays the interest, reducing its cash by $23,000.3. **December 31:** - **Debit Interest Expense:** This entry acknowledges the interest expense accrued for the second half of the year. - **Credit Cash:** The company makes the payment, reducing its cash by another $23,000.**Note:** Interest payments are computed semiannually based on the bond's coupon rate

Journal entry is the process of recording the business transactions in the books of accounts for the…

On January 1, Year 1, a company issues $460,000 of 5% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 4%, the bonds will issue at $511,511. Exercise 9-12B Part 2 2. Record the bond issue on January 1, Year 1, and the first two semiannual interest payments on June 30, Year 1, and December 31, Year 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Roun your final answers to the nearest whole dollar.)

On January 1, Year 1, a company issues $460,000 of 5% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. Assuming the market interest rate on the issue date is 4%, the bonds will issue at $511,511. Exercise 9-12B Part 2 2. Record the bond issue on January 1, Year 1, and the first two semiannual interest payments on June 30, Year 1, and December 31, Year 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Roun your final answers to the nearest whole dollar.)

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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