Question

Spring Water Company Ltd. needed to raise $71 million of additional capital to finance the expansion of its bottled water facility. After consulting an investment banker, it decided to issue bonds. The bonds had a face value of $71 million and an annual interest rate of 4.5%, paid semi-annually on June 30 and December 31, and will reach maturity on December 31, 2030. The bonds were issued at 96.1 on January 1,2021, for $68,231,000, which represented a yield of 5%. Show the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Cash I 71,000,000 Notes Payable 71,00

Answer 1

Thank you.

tn miel jounal Credit Dat Debit Accounts title and explanation January 2011 4 6812311000 Cash $ 68,231,000 Notes payable (To record Note payable Issued @96-1) Jane 30 $108,275 Interest fxpensel (681231,000x54\$) $1,705,115 Notes payable Cash (7740001000X6057586) 15971500 (To record interest payment on Nok payable) December 31 Interest Expensi (68, 339, 275 X5 X6 ) & $1708482 Notes payable $110,982 $15971500 cash, (71,000,000 XU 57.16) (To record interest payments Statement of financial Position for the year end December 31, 202) $ 68,450,457 Note payable [ 662311000 H08215+1101962)

For any clarification please comment