Prepare journal entries to record issuance of bounds, interest, balance sheet pr

Question

Prepare journal entries to record issuance of bounds, interest, balance sheet presentation, and bond redemption. (LO 5, 6, 7). AP On October 1, 2013, Koppa Corp, issued $7000,000, 5%, 10-year bonds at face value. The bonds were dated October 1, 2013, and pay interest annually on October 1. Financial statements are prepared annually on December 31. Instructions Prepare the journal entry to record the issuance of the bonds. Prepare the adjusting entry to record the accrual of interest on December 31, 2013. Show the balance sheet presentation of bonds payable and bond interest payable on December 31, 2013. Prepare the journal entry to record the payment of interest on October 1, 2014. Prepare the adjusting entry to record the accrual of interest on December 31, 2014

Explanation / Answer

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2013 1-Oct Cash Dr 700000 To 5% 10 yr Bond 700000 (Bond issue at par)

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