Question

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Exercise 14-12 (Algo) Bonds; straight-line method; adjusting entry [LO14-2] On March 1, 2021, Stratford Lighting issued 12% bonds, dated March 1, with a face amount of $630,000. The bonds sold for $621,000 and mature on February 28, 2041 (20 years). Interest is paid semiannually on August 31 and February 28. Stratford uses the straight- line method and its fiscal year ends December 31. Book Required: 1. to 4. Prepare the journal entries to record the issuance of the bonds by Stratford Lighting on March 1, 2021, interest on August 31, 2021, accrued interest on December 31, 2021 and interest on February 28, 2022. (Do not round your intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Hint View transaction list Ask Journal entry worksheet Print < 1 2 3 4 Record the issuance of the bond on March 1, 2021. erences Note: Enter debits before credits. General Journal Debit Credit Date March 01, 2021 Record entry Clear entry View general journal

Answer 1

Date	General Journal	Debit	Credit
March 01, 2021	Cash	621000
	Discount on bonds payable	9000
	Bonds payable		630000
August 31, 2021	Interest expense	38025
	Discount on bonds payable		225	=9000/20*6/12
	Cash		37800	=630000*12%*6/12
December 31,2021	Interest expense	25350
	Discount on bonds payable		150	=9000/20*4/12
	Interest payable		25200	=630000*12%*4/12
February 28,2022	Interest expense	12675
	Interest payable	25200
	Discount on bonds payable		75	=9000/20*2/12
	Cash		37800