Question

Nielson Bakers, Inc., completed the following selected transactions:
Year 1
Mar. 1 Issued $ 1,040,000 worth of 20-year, 6 percent bonds, dated March 1 of this year, at 103. Interest is payable semiannually on September 1 and March 1.
Sept. 1 Paid semiannual interest on the bonds.
Dec. 31 Recorded an adjusting entry for amortization of premium on bonds.
31 Recorded an adjusting entry for accrued interest payable.
31 Closed the Interest Expense account.
Year 2
Jan. 1 Reversed the adjusting entry for accrued interest payable.
Mar. 1 Paid semiannual interest on the bonds.
Sept. 1 Paid semiannual interest on the bonds.
Dec. 31 Made an adjusting entry to record amortization of premium on bonds.
31 Made an adjusting entry to record accrued interest payable.
31 Closed the Sinking Fund Income account.
31 Closed the Interest Expense account.

Required
1. Record the transactions in general journal form using pages 172 and 173 of the general journal.
2. Post entries to the Interest Expense account, No. 581. Label the adjusting, closing, and reversing entries.



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  • CreatedOctober 21, 2014
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