US Heo 1System Announcements CALCULATOR PRINTER rie Company issues *2.50 milion,

Question

US Heo 1System Announcements CALCULATOR PRINTER rie Company issues *2.50 milion, 10-year, 7% bonds at %, with interest payable on December 31. The straight-line method is used to amortize bond dscount Your answer is correct. Prepare the joumal entry to record the sale of these bonds on January 1, 2017. (Credit account titles are automaticaly indented when amount is entered. Do not indent manually.) Date Accoust Titles and Explanation on Bonos Payabie Attempts: 1 of 5 used Prepare the ypurnal entry to record interest expense and bend ditcount amarszation on December 31, 2017, terest. (Credit account titles are automatically indented whon amount is assuming no previous accrual o ontered De not indent manuany) Date Account Titles and Explanatien 6 8 9 delete return shit

Explanation / Answer

b) Journal entry :

Date accounts & explanation debit credit Dec 31 Interest expense 185000      Discount on bonds payable (100000/10) 10000      Cash (2500000*7%) 175000 (To record interest)

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