Question

On August 1, 2022, Flint Corporation issued $502,800, 7%, 10-year bonds at face value. Interest is payable annually on August 1. Flint's year-end is December 31. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Prepare the journal entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Dec. 31 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Prepare the journal entry to record the payment of interest on August 1, 2023. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Aug. 1

Answer 1

Answers

--Journal entries would be

Date	Accounts title	Debit	Credit
Aug-01	Cash	$502,800
	Bonds Payable		$502,800
	(to record issuance)
31-Dec	Interest Expense ($502800 x 7% x 5/12)	$14,665
	Interest Payable		$14,665
	(to record accrual of 5 month interest)
01-Aug	Interest Payable	$14,665
	Interest Expense ($502800 x 7% x 7/12)	$20,531
	Cash		$35,196
	(to record payment)