On January 1, Innovative Solutions, Inc. issued s270,000 in bonds at face value.

Question

On January 1, Innovative Solutions, Inc. issued s270,000 in bonds at face value. The bonds have a stated interest rate of 7 percent. The bonds mature in 10 years and pay interest once per year on December 31 uired: 1,2&3. Complete the required journal entries to record the bond issuance, interest payment on December 31, early retirement of the bonds. Assume the bonds were retired immediately after the first interest payment at a quoted price of 102. (If no entry is required for a transaction/event, select No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 2 Record the issuance of bonds of $270,000 at face value Date General Journal DebitCredit January 01

Explanation / Answer

Jan-01 Cash 270000      Bonds payable 270000 Dec-31 Interest expense 18900 =270000*7%      Cash 18900 Dec-31 Bonds payable 270000 Loss on retirement 5400      Cash 275400 =270000*1.02

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