Question

Brief Exercise 14-5 Teal Corporation issued $504,000 of 5% bonds on May 1, 2017. The bonds were dated January 1, 2017, and mature January 1, 2020, with interest payable July 1 and January 1. The bonds were issued at face value plus accrued interest. Prepare Teal's journal entries for (a) the May 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) No. Date Account Titles and Explanation Debit Credit (a) (b)

Answer 1

Journal entries:

date	account title	debit ($)	credit ($)
May 1	cash bonds payable interest expense ($504000 x 5% x (4/12)	$512400 . .	. $504000 $840
July 1	interest expense ($504000 x 5% x (6/12) cash	$12600 .	. $12600
December 31	interest expense interest payable	$12600 .	. $12600