Chapter 9, Problem 9.3S

(Learning Objective 1: Journalize basic bond payable transactions and bonds issued at par) Yancy Corp, issued 6% seven-year bonds payable with a face amount of $110,000 when the market interest rate was 6%. Yancy’s fiscal year-end is December 31. The bonds pay interest on January 1 and July 1. Journalize the following transactions for Yancy. Include an explanation for each entry.

  a.    Issuance of the bonds payable at par on July 1, 2018

  b.    Accrual of interest expense on December 31, 2018

  c.    Payment of cash interest on January 1, 2019

  d.    Payment of the bonds payable at maturity (give the date)