Question 1 On January 1, 2017, Forrester Company issued $226,000, 10%, 5-year bo

Question

Question 1 On January 1, 2017, Forrester Company issued $226,000, 10%, 5-year bonds 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 Date Account Titles and Explanation Debit Credit Jan. 1, 2017 SHOW LIST OF ACCOUNTS LINK TO TEXT 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.) DateAccount Titles and Explanation Debit Credit Dec. 31, 2017 SHOW LIST OF ACCOUNTS LINK TO TEXT 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.) Date Account Titles and Explanation Debit Credit Jan. 1, 2018 SHOW LIST OF ACCOUNTS

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Jan 1, 2017 Cash 226000 Bonds payable 226000 (TO record bonds issued) Dec 31,2017 Interest expense (226000*10%) 22600 Interest payable 22600 (To record accured interest) Jan 1, 2018 Interest payable 22600 Cash 22600 (To record interest paid)

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