Question

Burris Corporation is authorized to issue $940,000 of 6% bonds. Interest on the bonds is payable semiannually, the bonds are dated January 1, 2019, and are due December 31, 2023 Required: Prepare the journal entries to record the following: a April 1, 2019 June 30, 2019 December 31, 2019 Sold the bonds at par plus acero interest First interest payment Second interest payment c.

Answer 1

The following is the interest table for the bond:

Date	Interest period	Principle	Interest amount
April 1,2019	3 months	$940,000.00	$14,100.00
June 30,2019	3 months	$940,000.00	$14,100.00
December 31,2019	6 months	$940,000.00	$28,200.00

Since the bonds are sold on 1st April, 2019 with accrued interest the corporation would receive the interest also from the subscriber, post which interest would be accrued and paid to him semi-annually. Below are the journal entries:

Date	Ledger Name		Debit	Credit
1-Apr-19	Bank A/c	dr	$954,100
	To 6% Bond a/c			($940,000)
	To Interest on Bonds a/c			($14,100)
	(sold bonds at 940,000 + 14,100 interest)
30-Jun-19	Interest on Bonds a/c	dr	$28,200
	To Bank A/c			($28,200)
	(Being interest paid)
31-Dec-19	Interest on Bonds a/c	dr	$28,200
	To Bank A/c			($28,200)
	(Being interest paid)