1)

Cornerstone Exercise 9-26 (Algorithmic) Debt Issued at Par

On January 1, 2019, Drew Company issued $245,000 of bonds payable at par. The bonds have a 7% stated rate, pay interest on June 30 and December 31, and mature on December 31, 2019.

Required:

Prepare the journal entry to record the interest payment on June 30, 2019. Round your answers to the nearest dollar.

2019 June 30
	Record interest expense

2)

Bonds with Annual Interest Payments

Kiwi Corporation issued at par $350,000, 5% bonds on January 1, 2020. Interest is paid annually on December 31. The principal and the final interest payment are due on December 31, 2021.

Required:

b Prepare the entry to recognize the issuance of the bonds.

2020 Jan. 1
	Record issuance of bonds at par.

c Prepare the journal entry for December 31, 2020.

2020 Dec. 31
	Record interest expense

d Prepare the journal entry to record repayment of the principal on December 31, 2021.

2021 Dec. 31
	Record repayment of bond principal