Question

On August 1,2022, Swifty Corporation issued $505,200,8%, 10-year bonds at face value. Interest is payable annually on August 1. Swifty's year-end is December 31. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1 e Textbook and Media List of Accounts Prepare the journal entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 e Textbook and Media List of Accounts Prepare the journal entry to record the payment of interest on August 1, 2023. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1

Answer 1

Answer:

Date	Accounts Title	Debit($)	Credit($)
a	Cash	5,05,200
Aug 1 2017	Bonds payable		5,05,200
	(To record bond issued)
b	Interest expenses	16,840
31-Dec-17	Interest payable (505200*8%*5/12)		16,840
	(To record interest accured)
c	Interest expenses (505200*8%*7/12)	23,576
aug 1 2018	Interest payable	16,840
	Cash		40,416
	(To record Payment of interest made)