1 2018 Splash City issues S500000 of 9 bonds due in 20 years

1. 2018, Splash City issues S500,000 of 9% bonds, due in 20 years, with interest payable semiannualy on June 30 and December 31 each year Required: Assumingthe market rterest ate 2018, and December 31, 201 onthe issue date s 9%, the bonds will ssue at S500 000 Record the bon ssue on laruary,2018, 8 (If no entry is required for a transaction/event, select \"No journal entry required\" in the first account field.) View transaction list 1 Record the bond issue 2 Record the first semiannual interest payment 3 Record the second semiannual interest payment. Note: journal entry has been entered Record entry Clear entry

Solution

DR CR Cash 500000 Bond Payable 500000 (Bond Issue) Interest Expense 22500 Cash (500000*9%/2) 22500 (the first semi Annual Interest) Interest Expense 22500 Cash (500000*9%/2) 22500 (the second semi Annual Interest)