Question

Exercise 10-13 On January 1, Oriole Company issued $315,000, 10%, 10-year bonds at face value. Interest is payable annually on January 1. 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.) Debit Date Account Titles and Explanation Credit Jan. 1 Prepare the journal entry to record the accrual of interest on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Date Dec. 31

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Jan 01	Cash	$315,000
	Bonds Payable		$315,000
	(To record the issuance of the bonds)
Dec 31	Interest Expenses	$31,500
	Interest Payable		$31,500
	(To record the accrual of interest) ($315,000 x 10%)
Jan 01	Interest Payable	$31,500
	Cash		$31,500
	(To record the payment of interest)