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xWileyPLUS ure | https//edugen.wileyplus.com/edugen/student/mainfr.uni US Weygandt, Financial Accounting: IFRS, 3e & Practice Assignment Gradebook ORION Downloadable eTextbook Assignment RCES Problem 10-3A On May 1, 2017, Herron Industries AG issued CHF600,000, 9%, 5-year bonds at face value. The bonds were dated May 1, 2017, and pay interest annually on May 1. Financial statements are pr annually on December 31. epared 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,) Debit Credit Date Account Titles and Explanation May 1, 2017 Study Prepare the adjusting entry to record the accrual of interest on December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not i answers to 0 decimal places, e.g. 125.) ndent manually. Round Date Account Titles and Explanation Debit Credit Dec. 31, 2017 10 Show the statement of financial position pr decimal places, e.g. 125.) esentation on December 31, 2017. (Round answers to o HERRON INDUSTRIES AG I Privao.elicy I ?2000-2018JohnyulevASons.Inc. All Rights Reserved. A Division of

Explanation / Answer

Date Account Titles and Explanation Debit Credit May 1, 2017 Cash 600000 Bonds payable 600000 (To record issuance of bonds) Dec. 31, 2017 Interest expense 36000 Interest payable (CHF600000 x 9% x 8/12) 36000 (To record accrued interest) HERRON INDUSTRIES AG Statement of Financial Position December 31, 2017 Current Liabilities: Interest payable CHF36000 Long-Term Liabilities: Bonds payable CHF600000 Date Account Titles and Explanation Debit Credit May 1, 2018 Interest payable 36000 Interest expense (CHF600000 x 9% x 4/12) 18000 Cash 54000 (To record payment of interest) Dec. 31, 2018 Interest expense 36000 Interest payable (CHF600000 x 9% x 8/12) 36000 (To record accrued interest) Jan. 1, 2019 Interest payable 36000 Cash 36000 (To record payment of interest) Jan. 1, 2019 Bonds payable 600000 Loss on redemption of bonds 12000 Cash (CHF600000 x 102/100) 612000 (To record redemption of bonds)

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