Presented below are two independent situations. 1. On January 1, 2020, Headland Company issued $396,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2020, Sage Company issued $348,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. For each of these two independent situations, prepare journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest on July 1. (c) The accrual of interest on December 31.
Presented below are two independent situations. 1. On January 1, 2020, Headland Company issued $396,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2020, Sage Company issued $348,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. For each of these two independent situations, prepare journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest on July 1. (c) The accrual of interest on December 31.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Presented below are two independent situations.
| 1. | On January 1, 2020, Headland Company issued $396,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. | |
| 2. | On June 1, 2020, Sage Company issued $348,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. |
For each of these two independent situations, prepare
| (a) | The issuance of the bonds. | |
| (b) | The payment of interest on July 1. | |
| (c) | The accrual of interest on December 31. |
Transcribed Image Text:For each of these two independent situations, prepare journal entries to record the following. (If no entry is required, select "No Entry" for
the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent
manually.)
(a)
The issuance of the bonds.
(b)
The payment of interest on July 1.
(c)
The accrual of interest on December 31.
Date
Account Titles and Explanation
Debit
Credit
1.
Headland Company:
>
>
Transcribed Image Text:2.
Sage Company:
>
>
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