Question

On January 1, Wildhorse Co. issued $366,000, 7%, 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.) Date Account Titles and Explanation Debit Credit Jan. 1

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Jan 1	Cash	$366,000
	Bonds Payable		$366,000
	(To record issue of bonds)
Dec 31	Interest Expenses	$25,620		($366,000 x 7%)
	Interest Payable		$25,620
	(To record accrual of interest )
Jan 1	Interest Payable	$25,620
	Cash		$25,620
	(To record interest payment)