On October 1, 2016, Blue Corp. issued $732,000, 8%, 10-year bonds at face value. The bonds were dated October 1, 2016, and pay interest annually on October 1. Financial statements are prepared annually on December 31. (a) Prepare a tabular summary to record the issuance of the bonds and the adjustments to record the accrual of interest on December 31, 2016. (c) Prepare a tabular summary to record the payment of interest on October 1, 2017. (d) Prepare a tabular summary to record redemption of the bonds on October 1, 2026, their maturity date. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets Liabilities Stockholders' Equity Retained Earnings Cash = Bonds. Pay. + Interest Pay. + Common Stock + Revenue Expense Dividend (a) Oct. 1, 2016 24 $4 2$ Dec. 31, 2016 Interest expense (c) Oct. 1, 2017 Interest expense (d) Oct. 1, 2026

On October 1, 2016, Blue Corp. issued $732,000, 8%, 10-year bonds at face value. The bonds were dated October 1, 2016, and pay interest annually on October 1. Financial statements are prepared annually on December 31. (a) Prepare a tabular summary to record the issuance of the bonds and the adjustments to record the accrual of interest on December 31, 2016. (c) Prepare a tabular summary to record the payment of interest on October 1, 2017. (d) Prepare a tabular summary to record redemption of the bonds on October 1, 2026, their maturity date. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.) Assets Liabilities Stockholders' Equity Retained Earnings Cash = Bonds. Pay. + Interest Pay. + Common Stock + Revenue Expense Dividend (a) Oct. 1, 2016 24 $4 2$ Dec. 31, 2016 Interest expense (c) Oct. 1, 2017 Interest expense (d) Oct. 1, 2026

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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