Question

Entries for Issuing Bonds Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson Co. issued $870,000 of 10-year, 11% bonds on May 1 of the current year at face value,, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec. 31 Recorded accrued interest for two months. Journalize the entries to record the above selected transactions for the current year. May 1 Nov. 1 Nov. 1 - Dec. 31

Answer 1

May 1	Cash	870,000
	Bonds payable		870,000
Nov 1	Interest expense	47,850
	Cash		47,850
	(870,000*11%*6/12)
Dec 31	Interest expense	15950
	Interest payable		15950
	(870,000*11%*2/12)

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