Question

On October 1, 2016, Kristal Corp. issued $700,000, 5%, 10-year bonds at face value. The bonds were dated October 1, 2016, and pay interest annually on October 1. Financial statements are prepared annually on December 31. Instructions

(a)Prepare a tabular summary to record the issuance of the bonds and the adjustments to record the accrual of interest on December 31, 2016.

(b)Show the balance sheet presentation of bonds payable and bond interest payable on December 31, 2016.

(c)Prepare a tabular summary to record the payment of interest on October 1, 2017.

(d)Prepare a tabular summary to record redemption of the bonds on October 1, 2026, their maturity date.

Record stock transactions and prepare paid-in capital section.

Answer 1