Question

Rabbit Corp. issued 7.5 percent, 6-year bonds payable with a maturity value of $44,000 on January 1, 2018. Journalize the following transactions and include an explanation for each entry. The market rate of interest equaled the stated rate at the date of issuance. a. Issuance of the bond payable at par on January 1, 2018 b. Payment of semiannual interest on July 1, 2018 c. Payment of the bonds payable at maturity (give the date) a. Journalize the issuance of the bond payable at par on January 1, 2018 Journal Entry Accounts and Explanations Date Debit Credit Jan 1, 2018 b. Journalize the payment of semiannual interest on July 1, 2018 Journal Entry Accounts and Explanations Debit Credit Date 1, Jul 2018L C. Journalize payment of the bonds payable at maturity (give the date). (All interest has been paid to date.) Journal Entry Accounts and Explanations Date Debit Credit

Answer 1

Journal entry

Date	account title and explanation	Debit	Credit
Jan 1	cash	44000
	Bonds payable		44000
	(To record bond issue)
June 30	Interest expense (44000*7.5%*6/12)	1650
	Cash		1650
	(To record interest paid)
Dec 31,2023	Bonds payable	44000
	Cash		44000
	(To record maturity)