Bramble Corp. issued 3,400 896, 9-year, $1,000 bonds dated January 1, 2017, at f

Question

Bramble Corp. issued 3,400 896, 9-year, $1,000 bonds dated January 1, 2017, at face value. Înterest is paid each January 1 (a) Prepare the journal entry to record the sale of these bonds on January 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Jan. 1, 2017 (b) Prepare the adjusting journal entry on December 31, 2017, to record interest expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually Account Titles and Explanation Debit Credit Dec. 31, 2017 (c) Prepare the journal entry on January 1, 2018, to record interest paid. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2018

Explanation / Answer

Jan-1-17 Cash 3400000      Bonds Payable 3400000 31-Dec Interest expense 272000 =3400000*8%       Interest payable 272000 Jan-1-18 Interest payable 272000       Cash 272000

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