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On 7/1/17 lowa, Inc. issued $900,000 of 9% bonds dated 5/1/17 which are due 7/1/27. Interest is payable annually on 7/1. The

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Journal entries

Date Dr Cr
7/1/2017 Cash 9,00,000
9% Bonds payable 9,00,000
(Being 9% bonds issued)
7/1/2017 Bonds interest expense((9,00,000*9%*2/12) 13500
Interest payable 13500
(Being Interest expense accrued)
7/1/2017 Interest payable 13500
Cash 13500
(Being interest amount paid
12/31/2017 Bonds interest expense((9,00,000*9%*6/12) 40500
Interest payable 40500
(Being Interest expense accrued)
7/1/2018 Bonds interest expense((9,00,000*9%*6/12) 40500
Interest payable 40500
(Being Interest expense accrued)
7/1/2018 Interest payable 81000
Cash 81000
(Being interest amount paid
12/31/2018 Bonds interest expense((9,00,000*9%*6/12) 40500
Interest payable 40500
(Being Interest expense accrued)
7/1/2019 Bonds interest expense((9,00,000*9%*6/12) 40500
Interest payable 40500
(Being Interest expense accrued)
7/1/2019 Interest payable 81000
Cash 81000
(Being interest amount paid
12/31/2019 Bonds interest expense((9,00,000*9%*6/12) 40500
Interest payable 40500
(Being Interest expense accrued)
4/1/2020 Bonds interest expense((9,00,000*9%*3/12) 20250
Interest payable 20250
(Being Interest expense accrued)
4/1/2020 9% Bonds payable 900000
Interest payable 60750
Cash 952750
Gain on redemption os bonds 8000
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