Question

28 Mo Corp issued $1,000,000 of 6%, 5 year bonds on 10/1/18 at 96. 29 The bonds are dated 3/1/18. The bonds pay interest semiannually on 3/1 and 9/1. 30 Bo uses straight line amortization. Round all numbers to the nearest whole dollar. 32 1) Record the issuance of the bonds 39 2) Record accrual of interest on 12/31/18 44 3) Record interest payment on 3/1/19

Answer 1

10/1/2018	Issuance of Bonds
10/1/2018	Bank ……………Dr	960000
	Discount on issue	40000
	To Issue of Bonds		1000000
	(Being issue of Bonds on discount )
12/31/2018	Record accural of Interest
1/3/2018	Interest Expense	17000
	To Discount on issue		2000
	To Interest Payable		15000
	(Being Interest payable semi annually)
1/9/2018	Interest Expense	34000
	To Discount on issue		4000
	To Interest Payable		30000
	(Being Interest payable semi annually)
31/12/2018	Interest Expense	17000
	To Discount on issue		2000
	To Interest Payable		15000
	(Being Interest due till december)
31/01/19	Interest Payment
1/3/2019	Interest Payable	60000
	To Bank		60000
	(Being interest paid for the year )