Homework SourseThe Sarasota Company issued 270000 of 9 bonds on January 1 2
The Sarasota Company issued $270,000 of 9% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds are issued at face value.
Prepare Sarasota’s journal entries for (a) the January issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. (If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.)
No.
Date
Account Titles and Explanation
Debit
Credit
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Jan. 1, 2017July 1, 2017Dec. 31, 2017Solution
Answer
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2017
Cash
$ 2,70,000.00
Bonds Payable
$ 2,70,000.00
(bonds issued at face value)
July 1, 2017
Interest expense -$270,000 x 9% x 6/12)
$ 12,150.00
Cash
$ 12,150.00
(interest expenses paid for 6 months)
Dec. 31, 2017
Interest expense -$270,000 x 9% x 6/12)
$ 12,150.00
Interest payable
$ 12,150.00
(interest expenses accrued for 6 months)
| Date | Account Titles and Explanation | Debit | Credit |
| Jan. 1, 2017 | Cash | $ 2,70,000.00 | |
| Bonds Payable | $ 2,70,000.00 | ||
| (bonds issued at face value) | |||
| July 1, 2017 | Interest expense -$270,000 x 9% x 6/12) | $ 12,150.00 | |
| Cash | $ 12,150.00 | ||
| (interest expenses paid for 6 months) | |||
| Dec. 31, 2017 | Interest expense -$270,000 x 9% x 6/12) | $ 12,150.00 | |
| Interest payable | $ 12,150.00 | ||
| (interest expenses accrued for 6 months) |
