On the River Co. (OTRC) sells $1,000,000 of 10-year, 4% bonds at par plus accrued interest. The
Question:
On the River Co. (OTRC) sells $1,000,000 of 10-year, 4% bonds at par plus accrued interest. The bonds are dated January 1, 2021, but due to market conditions are not issued until May 1, 2021. Interest is payable on June 30 and December 31 each year.
Required:
Prepare journal entries to record:
a. The issuance of the bonds on May 1, 2021. Assume that OTRC has adopted a policy of crediting accrued interest payable for the accrued interest on the date of sale.
b. Payment of interest on June 30, 2021.
c. Payment of interest on December 31, 2021.
Step by Step Answer:
a The journal entries is as follows i June 30 2...View the full answer
Related Video
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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