Solution
Date | Account Title and Explanation | Debit | Credit |
January 01, 2021 | Cash | $ 500,000 | |
Bonds payable | $ 500,000 | ||
(To record Issuance of bonds ) | |||
June 30, 2021 | Bond interest expense | $ 22,500 | |
Cash | $ 22,500 | ||
(Interest on bond paid) | |||
December 31, 2021 | Bond interest expense | $ 22,500 | |
Cash | $ 22,500 | ||
(Interest on bond paid) |
Bond is issued at Par so there will be no premium or discount on bonds. The interest will be paid @4.5% on $500000.
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