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On August 1, 2017, Ayayai Corp. issued $506,400, 7% , 10- year bonds at face value. Interest is payable annually on August 1.
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Answer:

Assets = Liabilities + Stockholder's equity
Cash = Bonds payable + Interest payable + Common stock + Revenue - Expense - Dividends
(a) Aug 1, 2017       5,06,400                         5,06,400
(b) Dec 31 2017                      14,770                    -14,770 Interest expense
(C ) Aug 1 2018        -35,448                     -14,770                    -20,678 Interest expense
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