Question: Dixon Construction Inc issued 300 000 of 10 year 6 percent bonds

Dixon Construction, Inc., issued $300,000 of 10-year, 6 percent bonds on July 1, 2016, at 96.
Interest is payable in cash semiannually on June 30 and December 31. Dixon uses the straight- line method of amortization.
Required
a. Prepare the journal entries to record issuing the bonds and any necessary journal entries for 2016 and 2017. Prepare any necessary closing entries for 2016. Post the entries to T-accounts.
b. Prepare the liabilities section of the balance sheet at the end of 2016 and 2017.
c. What amount of interest expense will Dixon Construction report on the financial statements for 2016 and 2017?
d. What amount of cash will Dixon Construction pay for interest in 2016 and 2017?

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  • CreatedApril 20, 2015
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