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Cullumber Company issued $640,000 of 9%, 15-year bonds on January 1, 2017, at face value. Interest is payable annually on January 1.

Prepare a tabular summary to record the following events.

(a) The issuance of the bonds.
(b) The accrual of interest on December 31, 2017.
(c) The payment of interest on January 1, 2018.
(d) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.


Liabilities Stockholders Equity Retained Earnings Revenue - Expense - Dividend Cash = Bonds Pay. + Interest Pay. + Common St
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Answer #1

Table

Assets = Liabilities + Stockholder's equity
Retained earnings
Cash = Bonds Pay. + Interest pay + Common Stock + Revenue - Expense - Dividend
a Jan 1,2017 640000 640000
b Dec 31,2017 57600 -57600 Interest expense
c Jan 1,2018 -57600 -57600
d Jan 1, 2037 -640000 -640000
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