On January 1, 2014, JWS Corporation issued $613,000 of 7% bonds, due in 8 years.

Question

On January 1, 2014, JWS Corporation issued $613,000 of 7% bonds, due in 8 years. The bonds were issued for $577,287, and pay interest each July 1 and January 1. JWS uses the effective-interest method.

On January 1, 2014, JWS Corporation issued $613,000 of 7% bonds, due in 8 years. The bonds were issued for $577,287, and pay interes each July 1 and January 1. JWS uses the effective-interest method. Prepare the company's journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8 %. (Round answers to 0 decimal places, e.g. 38,548. 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.) No. Date Account Titles and Explanation Debit Credit (a) January 1, 2014 (b) July 1, 2014 (c) December 31, 2014 Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Solution:

Date Journal Debit Credit 1/12014 Cash 577,287 Discount on Issue of Bonds 35,713 Bonds Payable 613,000 Jul-01 Interest Expense 24520 Interest Payment 3065 Cash 21455 Dec-31 Interest Expense 24520 Interest Payment 3065 Cash 21455

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.