Question

Current Attempt in Progress Martinez Corp. issued 1,800 8%, 8-year $1.000 bonds dated January 1, 2022, at face value. Interest is paid each January 1. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan 1, 2022 (b) Prepare the adjusting journal entry on December 31, 2022, to record interest expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec 31, 2022 (c) Prepare the journal entry on January 1, 2023, to record interest paid. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1.2023

Answer 1

Solution:

Journal Entries - Martinez Corp.
Date	Particulars	Debit	Credit
1-Jan-22	Cash Dr	$1,800,000.00
	To Bond Payable		$1,800,000.00
	(To record issue of bond)
31-Dec-22	Interest Expense Dr	$144,000.00
	To Interest payable		$144,000.00
	(To record interest expense)
1-Jan-23	Interest payable Dr	$144,000.00
	To Cash		$144,000.00
	(To record interest payment)