bond accounting year of Scotiabenk ends on August axplanato suppose sootabank 38

Question

bond accounting year of Scotiabenk ends on August axplanato suppose sootabank 38 ed a s year $17.000 bond with a stated inte est ate of 5 50% t a. Issuance of the bond, payable on March 1, 2017 b. Accual of interest expense on August 31,2017 (rounded to the nearest dollar) c. Payment of cash interest on September 1, 2017 d. Payment of the bonde at maturity (give the date) of 5 50% he an et interest rate was 5 1 1/2%, Assume natthe 2 88 me at th accounting year of Scotiabank ends on August 31 Journa ze he following transactions ncluding an explanation or each en y Acrual of ino obe yodar

Explanation / Answer

Date Account titles Debit Credit Mar 1,2017 Cash 17000 Bonds payable 17000 (Issuance of bonds payable) Aug 31,2017 Interest expense 467.5 Interest payable 467.5 (Accrual of interest for 6 months) (17000*5.5%*6/12) Sep 1,2017 Interest payable 467.5 Cash 467.5 (Payment of cash interest) Feb 28,2023 Interest expense 467.5 Bonds payable 17000 Cash 17467.5 (Payment of bond at maturity)

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