Question

7:51 PM Wed Jan 29 C15 | Weygandt, Accounting Principles, 13e Helal System Announcements CALCULATOR PRINTER VERSION BACK NEXT Problem 15-01A a-f (Video) On May 1, 2020, Sandh Corp. issued 5870,000, 115, 5-year bonds at face value. The bonds were dated May 1, 2020, and pay interest annually on May 1. Financial statements are prepared annually on 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 Thies and Explanation Debit May 1, 2020 Cash 870000 Bonds Payable 870000 Prepare the adjusting entry to record the accrual of interest on December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to e. g. 5,675.) a Date Account Titles and Explanation Debit Credit Dec 31, 2020 Interest Expense 95700 Interest Payable 95700 Show the balance sheet' presentation on December 31, 2020. (Enter account name only and do not provide descriptive information. Round answers to decimal places, e.g. 5,675.) Sandhill Corp. Balance Sheet (Partial December 31, 2020 Long-term Liabilities Bonds Payable 870000

Answer 1

In Year 2020:

Date	Account title and Explanation	Debit	Credit
May 1,2020	Cash	$870,000
	Bonds payable		$870,000
	[To record issuance of bonds]
Dec. 31,2020	Interest expense [870,000 x 11% x 8/12]	$63,800
	Interest payable		$63,800
	[To record accrued interest expense]

Balance Sheet:

Shandill Corp.
Balance Sheet (Partial)
December 31,2020
Current liabilities:
Interest payable	$63,800
Long-term liabilities:
Bonds payable	$870,000

In Year 2021

Date	Account title and Explanation	Debit	Credit
May 1,2021	Interest payable	$63,800
	Interest expense	$31,900
	Cash (870,000 x 11%)		$95,700
	[To record interest payment]
Dec. 31,2021	Interest expense [870,000 x 11% x 8/12]	$63,800
	Interest payable		$63,800
	[To record accrued interest expense]

In Year 2022

Date	Account title and Explanation	Debit	Credit
Jan. 1,2022	Interest payable	$63,800
	Cash		$63,800
	[To record payment of interest]
Jan. 1,2022	Bonds payable	$870,000
	Loss on redemption	$17,400
	Cash (870,000 x 1.02)		$887,400
	[To record redemption of bonds]