On June 1, 2017, Weller SA issued 1,200,000, 8%, 5-year bonds at face value. The bonds were

Question:

On June 1, 2017, Weller SA issued €1,200,000, 8%, 5-year bonds at face value. The bonds were dated June 1, 2017, and pay interest annually on June 1. Financial statements are prepared annually on December 31.

Instructions

(a) Prepare the journal entry to record the issuance of the bonds.

(b) Prepare the adjusting entry to record the accrual of interest on December 31, 2017.

(d) Prepare the journal entry to record payment of interest on June 1, 2018.

(e) Prepare the adjusting entry to record the accrual of interest on December 31, 2018.

(f) Assume that on January 1, 2019, Weller pays the accrued interest and calls the bonds at 102. Record the payment of interest and redemption of the bonds.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...