PRINTER VERSION BACK NEXT MER ESOURCES Exercise 15-4 Laude Company issued $315,0

Question

PRINTER VERSION BACK NEXT MER ESOURCES Exercise 15-4 Laude Company issued $315,000 of 10%, 10-year bonds on January 1, 2017, at face value. Interest is payable annually on January 1. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Jan. 1, 2017 SHOW LIST OF ACCOUNTS ts by Study Prepare the journal entry to record the accrual of interest on December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2017 Prepare the journal entry to record the payment of interest on January 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) 28 F3 2 3 4 6

Explanation / Answer

Journal entry :

Date account and explanation debit credit Jan 1,2017 Cash 315000 Bonds payable 315000 (To record bond issue) Dec 31,2017 Interest expense (315000*10%) 31500 Interest payable 31500 (To record accured interest) jan 1,2018 Interest payable 31500 Cash 31500 (To record interest paid) Jan 1,2027 Bonds payable 315000 Cash 315000 (To record redemption of bonds)

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