On August 1, 2017, Bramble Corp. issued $508,800, 9%, 10-year bonds at face valu

Question

On August 1, 2017, Bramble Corp. issued $508,800, 9%, 10-year bonds at face value. Interest is payable annually on August 1. Bramble's year-end is December 31 Prepare journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Aug. 1 Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO: APPLIED SKILLS VIDEO: SIMILAR EXERCISE Prepare 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 SHOW LIST OF ACCOUNTS LINK TO TEXT VIDEO: APPLIED SKILLS VIDEO: SIMILAR EXERCISE Prepare journal entry to record the payment of interest on August 1, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1

Explanation / Answer

1-Aug Cash 508800       Bonds payable 508800 31-Dec Interest expense 19080 =508800*9%/12*5       Interest payable 19080 1-Aug Interest expense 26712 =508800*9%/12*7 Interest payable 19080        Cash 45792

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