Question

Help on how to calculate this would be appreciated. please show how to get the numbers.

Current Attempt in Progress The Oriole Company issued $640,000 of 6% bonds on January 1, 2017. The bonds are due January 1, 2027, with interest payable each July 1 and January 1. The bonds are issued at face value. Prepare Oriole's journal entries for (a) the January issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit

Answer 1

Date Account titles and explanation Debit Credit 01.01.2017 $ 640,000 Cash Bonds Payable (6% bonds issued at face value was recorded) $ 640,000 01.07.2017 $ 19,200 $ 19,200 Interest expense Cash ( Cash paid towards the first half yearly interest on bonds issued was recorded) 31.12.2017 $ 19,200 $ 19,200 Interest expenses Interest payable Interest expense accrued for the period July to December on the Bonds was recorded) Working Note: Half yearly Interest expense = Face value of bonds * Interest period * 6/12 = $ 640000 * 6% * 6/12 = $ 19,200