The board of directors of Laptops. Laptops Plus authorizes the issue of $9,000,0

Question

The board of directors of Laptops. Laptops Plus authorizes the issue of $9,000,000 of 8?%, 20?-year bonds payable. The semiannual interest dates are May 31 and November 30. The bonds are issued on May? 31, 2016,at par.

Requirements

1.

Journalize the following? transactions:

a. Issuance of half of the bonds on May? 31, 2016

b. Payment of interest on November? 30, 2016

c. Accrual of interest on December? 31, 2016

d. Payment of interest on May? 31, 2017

2.

Report interest payable and bonds payable as they would appear on the Laptops .Plus balance sheet at December? 31, 2016

Journalize the transactions a-d Record debits first then credits. Exclude explanations from journal entries.

1.

Journalize the following? transactions:

a. Issuance of half of the bonds on May? 31, 2016

b. Payment of interest on November? 30, 2016

c. Accrual of interest on December? 31, 2016

d. Payment of interest on May? 31, 2017

2.

Report interest payable and bonds payable as they would appear on the Laptops .Plus balance sheet at December? 31, 2016

Journalize the transactions a-d Record debits first then credits. Exclude explanations from journal entries.

Explanation / Answer

2.

1.a. Issue of half of the bonds on May 31, 2016 Date Account Title Debit Credit May 31, 2016 Cash 4500000 Bonds Payable 4500000 1.b. Payment of interest on Nov.30, 2016 Date Account Title Debit Credit Nov.30, 2016 Interest Expense 180000 Cash 180000 1.c. Accrual of interest on December 31, 2016 Date Account Title Debit Credit Dec.31, 2016 Interest Expense 30000 Interest Payable 30000 1.d. Payment of interest on May 31, 2017 Date Account Title Debit Credit May.31, 2017 Interest Expense 150000 Interest Payable 30000 Cash 180000

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