Question

The Novak Company issued $320,000 of 10% bonds on January 1, 2020. The bonds are due January 1, 2025, with interest payable each July 1 and January 1. The bonds are issued at face value.

Prepare Novak’s journal entries for (a) the January issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No. Date Account Titles and Explanation Debit Credit

(a)

choose a transaction date

Jan. 1, 2020July 1, 2020Dec. 31, 2020 enter an account title enter a debit amount enter a credit amount

enter an account title enter a debit amount enter a credit amount

(b)

choose a transaction date

Jan. 1, 2020July 1, 2020Dec. 31, 2020 enter an account title enter a debit amount enter a credit amount

enter an account title enter a debit amount enter a credit amount

(c)

choose a transaction date

Jan. 1, 2020July 1, 2020Dec. 31, 2020 enter an account title enter a debit amount enter a credit amount

enter an account title enter a debit amount enter a credit amount

Answer 1

Credit ($) Journal No. Date Account Titles and Explanation a 1-Jan Cash 10% Bonds payable (To record the issuance of bond at par) Debit ($) 320,000 320,000 b 16,000 1-Jul Interest expense (10%*320000*6/12) Cash (To record the payment of interest for 6 months) 16,000 C 16,000 31-Dec Interest expense (10%*320000*6/12) Interest payable (To record the interest expense accrued for 6 months) 16,000 Please give likes for the work. Thanks & Regards.