Australian Balloon Rides Ltd. issues $4,000,000 of five-year, 4% bonds dated January 1, 2018. Interest is payable
Question:
Australian Balloon Rides Ltd. issues $4,000,000 of five-year, 4% bonds dated January 1, 2018. Interest is payable on January 1 and July 1 each year. The proceeds realized from the issue were the $4,200,000 sales price less the $20,000 fee charged by Balloon’s lawyers. Balloon’s year-end is December 31.
Required:
Prepare journal entries to record:
a. The issuance of the bonds.
b. Payment of interest and related amortization on July 1, 2018.
c. Accrual of interest and related amortization on December 31, 2018.
Step by Step Answer:
a The journal entries for the issuance of the bonds is as follows i The Bonds Payable 70000 ii ExpenseBonds Issued 70000 iii Bonds Payable 20000 The e...View the full answer
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A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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