Assume the board of directors of The Saddle-dome Foundation authorizes the issue of $1 million of 8%,

Question:

Assume the board of directors of The Saddle-dome Foundation authorizes the issue of $1 million of 8%, 20-year bonds. The semi-annual interest dates are March 31 and September 30. The bonds are issued on March 31, 2017, at face value.

Requirements

1. Journalize the following transactions:

a. Issuance of the bonds on March 31, 2017

b. Payment of interest on September 30, 2017

c. Accrual of interest on December 31, 2017

d. Payment of interest on March 31, 2018

2. Report interest payable and bonds payable as they would appear on the Saddle-dome Foundation balance sheet at December 31, 2017?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...