Question

Required information [The following information applies to the questions displayed below.] On January 1, 2021, Twister Enterprises, a manufacturer of a variety of transportable spin rides, issues $570,000 of 8% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. Required: 1. If the market interest rate is 8%, the bonds will issue at $570,000. Record the bond issue on January 1, 2021, and the first two semiannual interest payments on June 30, 2021, and December 31, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

1. Record the bond issue
Date	General Journal	Debit	Credit
January 01, 2021	Cash	570000
	Bonds payable		570000
2. Record the first semiannual interest payment
Date	General Journal	Debit	Credit
June 30, 2021	Interest expense [ 570000 * 8% * 6/12 ]	22800
	Cash		22800
3. Record the second semiannual interest payment
Date	General Journal	Debit	Credit
December 31, 2021	Interest expense [ 570000 * 8% * 6/12 ]	22800
	Cash		22800