Thomson Co. produces and distributes semiconductors for use by computer manufact

Question

Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $960,000 of 10-year, 10% bonds on May 1 of the current year at face value,, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year.

Journalize the entries to record the above selected transactions for the current year.

May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec. 31 Recorded accrued interest for two months. Entries for Issuing Bonds Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $960,000 of 10-year, 10% bonds on May 1 of the current year at face value,, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec. 31 Recorded accrued interest for two months. Journalize the entries to record the above selected transactions for the current year May 1 Nov. 1 Dec. 31

Explanation / Answer

Journal entries :

Date accountss & explanation debit credit may 1 Cash a/c 960000 Bonds payable a/c 960000 Nov 1 Interest expenses a/c 48000 Cash a/c (960000*10%*6/12) 48000 Dec 31 Interest expenses a/c (960000*10%*2/12) 16000 Interest payable a/c 16000

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